SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

~~Milwaukee, Wisconsin~~

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and ~~"emerging~~“emerging growth ~~company"~~company” in Rule 12b-2 of the Exchange Act. ~~(Check one):~~

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

~~127,784,810~~114,592,022 shares of registrant’s Common Stock ~~$1.00 par value,~~ were outstanding on December 31, ~~2017~~.2023.

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~~ROCKWELL AUTOMATION, INC.~~

PART I. FINANCIAL INFORMATION

Item 1. ~~Condensed Consolidated~~ Financial Statements

ROCKWELL AUTOMATION, INC.

~~CONDENSED~~ CONSOLIDATED BALANCE SHEET

(Unaudited)

(in millions, except per share amounts)

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~~ROCKWELL AUTOMATION, INC.~~

See Notes to ~~Condensed~~ Consolidated Financial Statements.

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~~ROCKWELL AUTOMATION, INC.~~

See Notes to ~~Condensed~~ Consolidated Financial Statements.

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~~ROCKWELL AUTOMATION, INC.~~

Changes in assets and liabilities, excluding effects of acquisitions and foreign

currency adjustments:

See Notes to ~~Condensed~~ Consolidated Financial Statements.

CONSOLIDATED STATEMENT OF SHAREOWNERS’ EQUITY


	Common stock		Additional paid-in capital		Retained earnings		Accumulated other comprehensive loss		Common stock in treasury, at cost		Total attributable to Rockwell Automation, Inc.		Noncontrolling interests		Total shareowners' equity
Balance at September 30, 2023	$	181.4	$	2,102.5	$	9,255.2	$	(790.1)	$	(7,187.4)	$	3,561.6	$	181.8	$	3,743.4
Net income (loss)	—		—		215.2		—		—		215.2		(2.5)		212.7
Other comprehensive income	—		—		—		60.3		—		60.3		0.1		60.4
Common stock issued (including share-based compensation impact)	—		8.8		—		—		26.9		35.7		—		35.7
Share repurchases	—		—		—		—		(121.2)		(121.2)		—		(121.2)
Cash dividends declared (1)	—		—		(143.9)		—		—		(143.9)		—		(143.9)


Balance at December 31, 2023	$	181.4	$	2,111.3	$	9,326.5	$	(729.8)	$	(7,281.7)	$	3,607.7	$	179.4	$	3,787.1


	Common stock		Additional paid-in capital		Retained earnings		Accumulated other comprehensive loss		Common stock in treasury, at cost		Total attributable to Rockwell Automation, Inc.		Noncontrolling interests		Total shareowners' equity
Balance at September 30, 2022	$	181.4	$	2,007.1	$	8,411.8	$	(917.5)	$	(6,957.2)	$	2,725.6	$	291.1	$	3,016.7
Net income (loss)	—		—		384.0		—		—		384.0		(5.3)		378.7
Other comprehensive income	—		—		—		64.3		—		64.3		—		64.3
Common stock issued (including share-based compensation impact)	—		8.6		—		—		24.2		32.8		—		32.8
Share repurchases	—		—		—		—		(156.0)		(156.0)		—		(156.0)
Cash dividends declared (1)	—		—		(135.9)		—		—		(135.9)		—		(135.9)



Balance at December 31, 2022	$	181.4	$	2,015.7	$	8,659.9	$	(853.2)	$	(7,089.0)	$	2,914.8	$	285.8	$	3,200.6

(1) Cash dividends were $1.25 per share and $1.18 per share in the three months ended December 31, 2023 and 2022, respectively.

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ROCKWELL AUTOMATION, INC.

NOTES TO ~~CONDENSED~~ CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

In the opinion of management of Rockwell Automation, Inc. ("Rockwell Automation" or "the Company"), the unaudited ~~Condensed~~ Consolidated Financial Statements contain all adjustments necessary to present fairly the financial position, results of operations, and cash flows for the periods presented and, except as otherwise indicated, such adjustments consist only of those of a normal, recurring nature. These statements should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended September 30, ~~2017~~.2023. The results of operations for the three~~-month period~~ months ended December 31, ~~2017~~,2023, are not necessarily indicative of the results for the full year. All date references to years and quarters herein refer to our fiscal year and fiscal quarter, unless otherwise stated.

We record an allowance for doubtful accounts based on customer-specific analysis and general matters such as current assessments of past due balances and economic conditions. Receivables are ~~stated~~recorded net of an allowance for doubtful accounts of ~~$24.1~~$19.3 million at December 31, ~~2017~~,2023, and ~~$24.9~~$16.8 million at September 30, ~~2017. In addition, receivables are stated net of an~~2023. The changes to our allowance for ~~certain customer returns, rebates and incentives of~~ ~~$16.5 million~~ at doubtful accounts during the three months ended December 31, ~~2017~~,2023 and ~~$11.9 million~~ at ~~September 30, 2017~~.2022, were not material and primarily consisted of current-period provisions, write-offs charged against the allowance, recoveries collected, and foreign currency translation.

The following table reconciles basic and diluted ~~(loss)~~ earnings per share (EPS) amounts (in millions, except per share amounts):

Three Months Ended
December 31,
2017 2016
Net (loss) income $ (236.4 ) $ 214.7
Less: Allocation to participating securities 0.2
(0.2 )
Net (loss) income available to common shareowners $ (236.2 ) $ 214.5
Basic weighted average outstanding shares 128.2
128.3
Effect of dilutive securities
Stock options —
1.2
Performance shares —
0.2
Diluted weighted average outstanding shares 128.2
129.7
(Loss) Earnings per share:
Basic $ (1.84 ) $ 1.67
Diluted $ (1.84 ) $ 1.65

For the three months ended December 31, ~~2017, 2.8~~2023 and 2022, there were 0.5 million ~~potential common~~and 0.6 million shares, respectively, related to share-based compensation awards were excluded from the diluted EPS calculation because we recorded a net loss from continuing operations. Of these shares, 1.9 million would have been included in the calculation had we recorded net income from continuing operations in the first quarter of fiscal 2018. For the ~~three~~ ~~months ended December 31, 2016, 1.0 million shares related to share-based compensation awards~~that were excluded from the diluted EPS calculation because they were antidilutive.

Non-Cash Investing and Financing Activities

Capital expenditures of ~~$13.0~~$20.5 million and ~~$12.9~~$32.9 million were accrued within ~~accounts~~Accounts payable and ~~other~~Other current liabilities at December 31, ~~2017~~2023 and ~~2016,~~2022, respectively. At December 31, ~~2017~~2023 and ~~2016,~~2022, respectively, there were ~~$17.8~~$1.1 million and ~~$4.5~~$0.8 million ~~respectively,~~ of outstanding common stock share repurchases recorded in ~~accounts~~Accounts payable that did not settle until the next ~~fiscal~~ quarter. These non-cash investing and financing activities have been excluded from cash used for capital expenditures and treasury stock purchases in the ~~Condensed~~ Consolidated Statement of Cash Flows.

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ROCKWELL AUTOMATION, INC.

NOTES TO ~~CONDENSED~~ CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

~~1. Basis of Presentation and Accounting Policies (continued)~~

Supplier Financing Arrangements

~~Recent~~The Company maintains agreements with third-party financial institutions that offer voluntary supply chain financing (SCF) programs to suppliers. The SCF programs enable suppliers, at their sole discretion, to sell their receivables to third-party financial institutions in order to receive payment on receivables earlier than the negotiated commercial terms between suppliers and the Company. Supplier sale of receivables to third-party financial institutions is on terms negotiated between the supplier and the respective third-party financial institution. The Company agrees on commercial terms for the goods and services procured from suppliers, including prices, quantities, and payment terms, regardless of whether the supplier elects to participate in the SCF programs. A supplier’s voluntary participation in the SCF programs has no bearing on the Company's payment terms and the Company has no economic interest in a supplier’s decision to participate in the SCF programs. The Company agrees to pay participating third-party financial institutions the stated amount of confirmed invoices from suppliers on the original maturity dates of the invoices. Amounts outstanding related to SCF programs are included in Accounts payable in the Consolidated Balance Sheet and in changes in Accounts payable on the Consolidated Statement of Cash Flows. Accounts payable included approximately $117.5 million and $126.7 million related to these agreements as of December 31, 2023, and September 30, 2023, respectively. The impact of these programs is not material to the Company's overall liquidity.

Recently Adopted Accounting Pronouncements

In ~~March 2017,~~September 2022, the ~~FASB~~Financial Accounting Standards Board (FASB) issued a new standard ~~regarding~~that requires companies to apply Accounting Standards Codification (ASC) 405-50 to disclose supplier finance program obligations. We adopted the ~~presentation~~new standard as of net periodic pension and postretirement benefit costs. This standard requires the service cost component to be reported in the income statement in the same line item as other compensation costs arising from services rendered by the related employees during the period. The other components of net periodic benefit cost are required to be presented separately from the service cost component in either a separate line item or within another appropriate line item with disclosure of where those costs are recorded. This standard also requires that only the service cost component is eligible for capitalization, when applicable. This standard is effective for us for reporting periods starting October 1, ~~2018. We are currently evaluating the impact the~~2023. The adoption of this standard ~~will~~did not have a material impact on our ~~consolidated financial statements~~Consolidated Financial Statements.

Recently Issued Accounting Pronouncements

In November 2023, the FASB issued Accounting Standards Update (ASU) 2023-08, which requires expanded interim and annual disclosures of segment information regularly provided to the chief operating decision maker (CODM), the title and position of the CODM, an explanation of how the CODM uses the information in assessing segment performance and deciding how to allocate resources, and an amount for other segment items by reportable segment and a description of its composition. We will expand our disclosures in our fiscal 2025 Annual Report on Form 10-K when the standard becomes effective for us.

In December 2023, the FASB issued ASU 2023-09, which requires expanded annual disclosures to the income tax rate reconciliation and the amount of income taxes paid. We will expand our disclosures in our fiscal 2026 Annual Report on Form 10-K when the standard becomes effective for us.

We do not expect any other recently issued accounting pronouncements to have a material impact on our Consolidated Financial Statements and related disclosures.

In February 2016, the FASB issued a new standard on accounting for leases that requires lessees to recognize right-of-use assets and lease liabilities for most leases, among other changes to existing lease accounting guidance. The new standard also requires additional qualitative and quantitative disclosures about leasing activities. This standard

2. Revenue Recognition

Substantially all of our revenue is effective for us for reporting periods beginning October 1, 2019. We are currently evaluating the impact the adoption of this standard will have on our consolidated financial statements and related disclosures.

Our products include hardware, software, and configured-to-order products. Our solutions include custom-engineered systems and software. Our services include customer technical support and repair, asset management and optimization consulting, and training. Also included in ~~applying~~our services is a portion of revenue related to spare parts that are managed within our services offering.

Our operations are comprised of the ~~revenue guidance,~~Intelligent Devices segment, the Software & Control segment, and ~~assets recognized~~the Lifecycle Services segment. Revenue from the ~~costs to obtain or fulfill~~Intelligent Devices and Software & Control segments is predominantly comprised of product sales, which are recognized at a ~~contract. We will adopt this new standard under the modified retrospective method~~point in ~~the first quarter of fiscal 2019, with the cumulative effect of initially applying the guidance recognized in retained earnings at the adoption date.~~

In most countries, we sell primarily through independent distributors in conjunction with our direct sales force. We ~~also expect changes to~~sell large systems and service offerings principally through our ~~processes, controls and systems to enable compliance with this new standard.~~

direct sales force, though opportunities are sometimes identified through distributors.

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ROCKWELL AUTOMATION, INC.

NOTES TO ~~CONDENSED~~CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

Unfulfilled Performance Obligations

As of December 31, 2023, we expect to recognize approximately $1,121 million of revenue in future periods from unfulfilled performance obligations from existing contracts with customers. We expect to recognize revenue of approximately $716 million from our remaining performance obligations over the next 12 months with the remaining balance recognized thereafter.

We have applied the practical expedient to exclude the value of remaining performance obligations for (i) contracts with an original term of one year or less and (ii) contracts for which we recognize revenue in proportion to the amount we have the right to invoice for services performed. The amounts above also do not include the impact of contract renewal options that are unexercised as of December 31, 2023.

Disaggregation of Revenue

The following table presents our revenue disaggregation by geographic region for our three operating segments (in millions). We attribute sales to the geographic regions based on the country of destination.


	Three Months Ended December 31, 2023								Three Months Ended December 31, 2022
	Intelligent Devices		Software & Control		Lifecycle Services		Total		Intelligent Devices		Software & Control		Lifecycle Services		Total
North America	$	604.3	$	386.6	$	256.2	$	1,247.1	$	567.4	$	384.1	$	227.4	$	1,178.9
Europe, Middle East, and Africa	166.6		99.8		121.9		388.3		171.2		85.8		115.8		372.8
Asia Pacific	97.9		79.0		98.7		275.6		131.3		68.4		96.8		296.5
Latin America	58.5		38.2		44.4		141.1		66.3		35.0		31.5		132.8
Total Company Sales	$	927.3	$	603.6	$	521.2	$	2,052.1	$	936.2	$	573.3	$	471.5	$	1,981.0

Contract Liabilities

Contract liabilities primarily relate to consideration received in advance of performance under the contract.

Below is a summary of our Contract liabilities balance, the portion not expected to be recognized within twelve months is included within Other liabilities in the Consolidated Balance Sheet (in millions):

The most significant changes in our Contract liabilities balance during both the three months ended December 31, 2023 and 2022, were due to amounts billed, partially offset by revenue recognized that was included in the Contract liabilities balance at the beginning of the period and revenue recognized on amounts billed during the period.

In the three months ended December 31, 2023, we recognized revenue of approximately $237.8 million that was included in the Contract liabilities balance at September 30, 2023. In the three months ended December 31, 2022, we recognized revenue of approximately $200.9 million that was included in the Contract liabilities balance at September 30, 2022. We did not have a material amount of revenue recognized in the three months ended December 31, 2023 and 2022, from performance obligations satisfied or partially satisfied in previous periods.

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ROCKWELL AUTOMATION, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

2.3. Share-Based Compensation

We recognized ~~$8.6~~$24.2 million and ~~$10.7~~$18.4 million of pre-tax share-based compensation expense during the three months ended December 31, ~~2017~~,2023 and ~~December 31, 2016,~~2022, respectively. Our annual grant of share-based compensation takes place during ~~the~~ first quarter of each ~~fiscal~~ year. The number of shares granted to employees and non-employee directors and the weighted average fair value per share during the periods presented were (in thousands, except per share amounts):

Three Months Ended December 31,
2017 2016
Grants
Wtd. Avg.
Share
Fair Value
Grants
Wtd. Avg.
Share
Fair Value
Stock options 837
$ 35.54
943
$ 25.27
Performance shares 40
219.04
42
174.37
Restricted stock and restricted stock units 31
192.70
41
135.17
Unrestricted stock 5
180.70
6
120.57

Inventories consist of (in millions):

December 31,
2017 September 30,
2017
Finished goods $ 235.3
$ 218.7
Work in process 178.7
168.0
Raw materials 156.8
172.0
Inventories $ 570.8
$ 558.7
2024 Acquisitions

In October 2023, we acquired Clearpath Robotics, Inc. (Clearpath), a company that specializes in autonomous robotics for industrial applications, headquartered in Ontario, Canada. We recorded assets acquired and liabilities assumed in connection with this acquisition based on their estimated fair values as of the acquisition date of October 2, 2023. The preliminary aggregate purchase price allocation is as follows (in millions):

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ROCKWELL AUTOMATION, INC.

NOTES TO ~~CONDENSED~~ CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

Intangible assets identified include $269.6 million of technology, $41.6 million of trademarks, and $1.9 million of customer relationships. We assigned the full amount of goodwill and all other assets acquired to our Intelligent Devices segment. The goodwill recorded represents intangible assets that do not qualify for separate recognition. This goodwill arises because the purchase price for Clearpath reflects a number of factors including the future earnings and cash flow potential for the business and resulting synergies from the business portfolio and industry expertise. We do not expect the goodwill to be deductible for tax purposes. The intangible assets were valued using an income approach, specifically the relief from royalty method and multi-period excess earnings method. The relief from royalty method calculates value based on hypothetical payments that would be saved by owning an asset rather than licensing it. The multi-period excess earnings method is the isolation of cash flows from a single intangible asset and measures fair value by discounting them to present value. These values are considered level 3 measurements under the U.S. GAAP fair value hierarchy. The key assumption requiring the use of judgement in the valuation of the technology asset was the obsolescence factor, where we estimated a phase out over 12 years; other assumptions included forecasted revenue growth rates and margin and the discount rate. The key assumption requiring the use of judgement in the valuation of the trademarks asset was the weighted average royalty rate of 2.05 percent; other assumptions included forecasted revenue growth rates and the discount rate.

4.The purchase price includes up to $50 million in contingent consideration dependent on future Clearpath revenue performance. We developed various risk-based scenarios and a probability outcome model to measure the fair value of the contingent consideration, which is considered a level 3 measurement under the U.S. GAAP fair value hierarchy. At the acquisition date and December 31, 2023, we determined the fair value of the contingent consideration to be $43.0 million, of which $17.5 million is recorded in Other current liabilities and $25.5 million in Other liabilities on the Consolidated Balance Sheet.

In November 2023, we acquired Verve Industrial Protection (Verve), a cybersecurity software and services company that focuses specifically on industrial environments. We recorded assets acquired and liabilities assumed in connection with this acquisition based on their estimated fair values as of the acquisition date of November 1, 2023. The preliminary aggregate purchase price allocation is as follows (in millions):


	Purchase Price Allocation
Receivables	$	8.0
Goodwill	133.0
Intangible assets	47.0
All other assets	1.4
Total assets acquired	189.4
Less: Liabilities assumed	(6.2)
Net assets acquired	$	183.2

	Purchase Consideration


Total purchase consideration, net of cash acquired	$	183.2

We assigned the full amount of goodwill to our Lifecycle Services segment. We expect the goodwill to be deductible for tax purposes. The goodwill recorded represents intangible assets that do not qualify for separate recognition.

The allocations of the purchase prices to identifiable assets above is based on the preliminary valuations performed to determine the fair value of the net assets as of the acquisition date. The measurement period for the valuation of net assets acquired ends as soon as information on the facts and circumstances that existed as of the acquisition date becomes available, but not to exceed 12 months following the acquisition date. Adjustments in purchase price allocations may require a change in the amounts allocated to net assets acquired during the periods in which the adjustments are determined.

Pro forma consolidated sales for the three months ended December 31, 2023 and 2022, were $2.1 billion and $2.0 billion, respectively, and the impact on earnings was not material. The preceding pro forma consolidated financial results of operations are as if the preceding 2024 acquisitions occurred on October 1, 2022. The pro forma information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved had the transaction occurred as of that time.

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ROCKWELL AUTOMATION, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

Total sales from all of the above 2024 acquisitions in the three months ended December 31, 2023 were $17.2 million. Total acquisition-related costs from all of the above 2024 acquisitions in the three months ended December 31, 2023, were not material.

In October 2022, we acquired CUBIC, a company that specializes in modular systems for the construction of electrical panels, headquartered in Bronderslev, Denmark. We assigned the full amount of goodwill related to this acquisition to our Intelligent Devices segment.

In February 2023, we acquired Knowledge Lens, a services and solutions provider headquartered in Bengaluru, India. We assigned the full amount of goodwill related to this acquisition to our Lifecycle Services segment.

We recorded assets acquired and liabilities assumed in connection with these acquisitions based on their estimated fair values as of the acquisition dates of October 31, 2022, and February 28, 2023, respectively. The aggregate purchase price allocation is as follows (in millions):

Pro forma consolidated sales for the three months ended December 31, 2022, were $2.0 billion, and the impact on earnings was not material. The preceding pro forma consolidated financial results of operations are as if the preceding 2023 acquisitions occurred on October 1, 2022. The pro forma information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved had the transaction occurred as of that time.

Total sales from all of the above 2023 acquisitions in the three months ended December 31, 2023 and 2022, were $26.8 million and $13.7 million, respectively. Total acquisition-related costs from all of the above 2023 acquisitions in the three months ended December 31, 2022, were not material.

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ROCKWELL AUTOMATION, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

6. Goodwill and Other Intangible Assets

Changes in the carrying amount of ~~goodwill~~Goodwill for the three months ended December 31, ~~2017, are~~2023, were (in millions):

Allen-Bradley^® trademark not subject to amortization

We perform our annual evaluation of goodwill and indefinite life intangible assets for impairment ~~as required by accounting principles generally accepted in the United States (U.S. GAAP)~~ during the second quarter of each ~~year.~~year, or more frequently, if events or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. We assessed the changes in events and circumstances during the first quarter of 2024 and concluded that no triggering events, which would require interim quantitative testing, occurred.

Other intangible assets consist of (in millions):


	December 31, 2023
	Carrying Amount		Accumulated Amortization		Net
Amortized intangible assets
Software products	$	105.1	$	67.8	$	37.3
Customer relationships	618.4		152.2		466.2
Technology	737.6		194.8		542.8
Trademarks	133.0		33.1		99.9
Other	5.7		5.2		0.5
Total amortized intangible assets	1,599.8		453.1		1,146.7
Allen-Bradley® trademark not subject to amortization	43.7		—		43.7
Other intangible assets	$	1,643.5	$	453.1	$	1,190.4


	September 30, 2023
	Carrying Amount		Accumulated Amortization		Net
Amortized intangible assets
Software products	$	100.4	$	65.1	$	35.3
Customer relationships	606.1		141.3		464.8
Technology	424.1		173.1		251.0
Trademarks	86.3		29.3		57.0
Other	6.0		5.4		0.6
Total amortized intangible assets	1,222.9		414.2		808.7
Allen-Bradley® trademark not subject to amortization	43.7		—		43.7
Other intangible assets	$	1,266.6	$	414.2	$	852.4

Estimated total amortization expense for all amortized intangible assets is $153.5 million in 2024, $150.0 million in 2025, $148.7 million in 2026, $140.6 million in 2027, and $127.8 million in 2028.

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ROCKWELL AUTOMATION, INC.

NOTES TO ~~CONDENSED~~ CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

~~5. Short-term~~7. Short-Term and Long-Term Debt

Our ~~short-term~~Short-term debt ~~obligations primarily consist~~as of December 31, 2023, includes commercial paper ~~borrowings. Commercial paper~~ borrowings ~~outstanding were $839.4~~of $407.0 million, ~~and $350.0 million at December 31, 2017, and September 30, 2017, respectively. The~~with a weighted average interest rate of ~~the~~5.41 percent, and a weighted average maturity period of 13 days. We had no commercial paper ~~outstanding was 1.66 percent and 1.26 percent at~~borrowings as of September 30, 2023. In December 2022, Sensia entered into an unsecured $75.0 million line of credit. As of December 31, ~~2017,~~2023, and September 30, ~~2017,~~2023, included in Short-term debt was $70.0 million borrowed against the line of credit with an interest rate of 6.25 percent and 6.29 percent, respectively.

The following table presents the carrying amounts and estimated fair values of Long-term debt in the Consolidated Balance Sheet (in millions):


	December 31, 2023				September 30, 2023
	Carrying Value		Fair Value		Carrying Value		Fair Value
Current portion of long-term debt	$	9.9	$	9.9	$	8.6	$	8.6
Long-term debt	2,863.0		2,623.1		2,862.9		2,442.6

We base the fair value of Long-term debt upon quoted market prices for the same or similar issues and therefore consider this a level 2 fair value measurement. The fair value of Long-term debt considers the terms of the debt excluding the impact of derivative and hedging activity. Refer to Note 9 for further information regarding levels in the fair value hierarchy. The carrying value of our Short-term debt approximates fair value.

8. Other Current Liabilities

Other current liabilities consist of (in millions):


	December 31, 2023		September 30, 2023
Unrealized losses on foreign exchange contracts	$	26.5	$	10.8
Product warranty obligations	19.0		18.3
Taxes other than income taxes	48.8		56.9
Accrued interest	38.1		18.6

Income taxes payable	262.1		248.6
Operating lease liabilities	91.3		83.4
Other	122.8		130.8
Other current liabilities	$	608.6	$	567.4

December 31,
2017 September 30,
2017
Unrealized losses on foreign exchange contracts $ 28.8
$ 31.3
Product warranty obligations 33.9
28.5
Taxes other than income taxes 50.3
42.7
Accrued interest 15.1
16.9
Income taxes payable 35.8
32.6
Other 61.9
68.2
Other current liabilities $ 225.8
$ 220.2

~~7. Product Warranty Obligations~~

~~Changes in product warranty obligations for the~~ ~~three~~ ~~months ended~~ ~~December 31, 2017~~ ~~and~~ ~~2016~~ ~~are (in millions):~~

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~~ROCKWELL AUTOMATION, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(Unaudited)~~

We invest in certificates of deposit, time deposits, commercial paper and other fixed income securities. All investments meeting the U.S. GAAP definition of a security were classified as available-for-sale as of December 31, 2017, and September 30, 2017. Unrealized gains and losses on available-for-sale investments are included in our Condensed Consolidated Balance Sheet as a component of accumulated other comprehensive loss, net of any deferred taxes. Realized gains and losses are included in net income.

Our investments consist of (in millions):


	December 31, 2023		September 30, 2023
Fixed income securities	$	0.6	$	0.6

Equity securities (other)	98.5		96.0
Other	63.4		61.1
Total investments	162.5		157.7
Less: Short-term investments (1)	(0.6)		(0.6)
Long-term investments	$	161.9	$	157.1

December 31,
2017 September 30,
2017
Certificates of deposit and time deposits $ 975.1
$ 1,005.3
Commercial paper 26.4
20.3
Corporate debt securities 201.0
199.4
Government securities 123.9
116.8
Asset-backed securities 48.2
45.8
Total $ 1,374.6
$ 1,387.6

~~Classification of our investments as current or noncurrent is based on the nature of the investment and when the investment is reasonably expected to be realized. These investments were~~are included in Other current assets in the ~~following line items within the Condensed~~ Consolidated Balance ~~Sheet (in millions):~~Sheet.

December 31,
2017 September 30,
2017
Short-term investments $ 1,100.5
$ 1,124.6
Other assets 274.1
263.0
Total $ 1,374.6
$ 1,387.6

Table of Contents

ROCKWELL AUTOMATION, INC.

NOTES TO ~~CONDENSED~~ CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

Equity Securities

~~8. Investments (continued)~~Equity securities (other) consist of various securities that do not have a readily determinable fair value, which we account for using the measurement alternative under U.S. GAAP. These securities are recorded at the investment cost, less impairment, plus or minus observable price changes (in orderly transactions) of an identical or similar investment of the same issuer in the Consolidated Balance Sheet. Observable price changes are classified as level 2 in the fair value hierarchy, as described below. The carrying values at December 31, 2023, and September 30, 2023, include cumulative upward adjustments from observed price changes of $20.0 million and $17.5 million, respectively.

~~Fair Value~~We record gains and losses on investments within the Change in fair value of ~~Investments~~investments line in the Consolidated Statement of Operations. The gains and losses on investments we recorded for the following periods were (in millions):


	Three Months Ended December 31,
	2023		2022
Net gain on equity securities (level 1)	$	—	$	141.0
Net gain on equity securities (other)	2.5		—
Equity method gain (loss) on Other investments	0.6		(0.4)
Change in fair value of investments	3.1		140.6

Total net realized gain on equity securities	—		33.9
Total net unrealized gain on equity securities	$	2.5	$	107.1

Net gain on equity securities (level 1) in the prior year consisted of the change in fair value and gain on sale of shares of PTC Inc. (PTC) common stock (PTC Shares). As of September 30, 2023, all PTC Shares have been sold.

U.S. GAAP defines fair value as the price that would be received for an asset or paid to transfer a liability (exit price) in an orderly transaction between market participants in the principal or most advantageous market for the asset or liability. U.S. GAAP also classifies the inputs used to measure fair value into the following hierarchy:



Level 1:				Quoted prices in active markets for identical assets or liabilities.



Level 2:				Quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability.



Level 3:				Unobservable inputs for the asset or liability.

We recognize all available-for-sale investments at fair value in the Condensed Consolidated Balance Sheet. The valuation methodologies used for our investments measured at fair value are described as follows.

~~Certificates of deposit and time deposits~~ ~~— These investments are stated at cost, which approximates fair value.~~

~~Commercial paper~~ ~~— These investments are stated at amortized cost, which approximates fair value.~~

~~Corporate debt securities~~ — Valued at either the yields currently available on comparable securities of issuers with similar credit ratings or valued under a discounted cash flow approach that maximizes observable inputs, such as current yields of similar instruments, but includes adjustments for certain risks that may not be observable such as credit and liquidity risks.

~~Government securities~~ — Valued at the most recent closing price on the active market on which the individual securities are traded or, absent an active market, utilizing observable inputs such as closing prices in less frequently traded markets.

~~Asset-backed securities~~ — Valued using a discounted cash flow approach that maximizes observable inputs, such as current yields of benchmark instruments, but includes adjustments for certain risks that may not be observable such as credit and liquidity risks.

The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while we believe our valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date. We did not ~~hold any Level 3 investments or~~ have any transfers between levels of fair value measurements during the ~~periods~~period presented.

Table of Contents

ROCKWELL AUTOMATION, INC.

NOTES TO ~~CONDENSED~~ CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

~~8. Investments (continued)~~

~~Fair values of our investments were (in millions):~~

December 31, 2017

Level 1 Level 2 Level 3 Total
Certificates of deposit and time deposits $ —
$ 975.1
$ —
$ 975.1
Commercial paper —
26.4
—
26.4
Corporate debt securities —
201.0
—
201.0
Government securities 106.1
17.8
—
123.9
Asset-backed securities —
48.2
—
48.2
Total $ 106.1
$ 1,268.5
$ —
$ 1,374.6

September 30, 2017
Level 1 Level 2 Level 3 Total
Certificates of deposit and time deposits $ —
$ 1,005.3
$ —
$ 1,005.3
Commercial paper —
20.3
—
20.3
Corporate debt securities —
199.4
—
199.4
Government securities 98.9
17.9
—
116.8
Asset-backed securities —
45.8
—
45.8
Total $ 98.9
$ 1,288.7
$ —
$ 1,387.6

9.10. Retirement Benefits

The components of net periodic pension and postretirement benefit cost ~~(income) are~~(credit) were (in millions):


		Pension Benefits
	Three Months Ended December 31,
		2023		2022
Service cost		$	9.3	$	10.6
Interest cost		36.6		39.2
Expected return on plan assets		(42.2)		(51.3)

Amortization of net actuarial gain		(0.3)		(1.0)

Net periodic pension benefit cost (credit)		$	3.4	$	(2.5)


		Other Postretirement Benefits
	Three Months Ended December 31,
		2023		2022
Service cost		$	0.1	$	0.1
Interest cost		0.6		0.6

Amortization of net actuarial loss		0.4		0.1
Net periodic postretirement benefit cost		$	1.1	$	0.8

The service cost component is included in Cost of sales and Selling, general and administrative expenses in the Consolidated Statement of Operations. All other components are included in Other income in the Consolidated Statement of Operations.

11. Other Income

The components of Other income were (in millions):


	Three Months Ended December 31,
		2023		2022
Interest income		$	5.0	$	1.3
Royalty income		2.8		2.5
Legacy product liability and environmental charges		(5.0)		(2.8)
Non-operating pension and postretirement benefit credit		4.9		12.4

Other		1.2		3.9
Other income		$	8.9	$	17.3

Pension Benefits
Three Months Ended
December 31,
2017 2016
Service cost $ 22.2
$ 24.1
Interest cost 38.8

37.8
Expected return on plan assets (61.2 )
(56.2 )
Amortization:
Prior service cost (credit) 0.2
(0.8 )
Net actuarial loss 28.3

38.0
Settlements —
0.2
Net periodic benefit cost $ 28.3
$ 43.1

Other Postretirement Benefits
Three Months Ended
December 31,
2017 2016
Service cost $ 0.3
$ 0.3
Interest cost 0.6
0.6
Amortization:
Prior service credit (1.3 ) (1.5 )
Net actuarial loss 0.4
0.5
Net periodic benefit cost (income) $ —
$ (0.1 )

Table of Contents

ROCKWELL AUTOMATION, INC.

NOTES TO ~~CONDENSED~~ CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

~~10.~~12. Accumulated Other Comprehensive Loss

Changes in ~~accumulated~~Accumulated other comprehensive loss attributable to Rockwell Automation by component for the ~~three~~ ~~months ended December 31, 2017,~~following periods were (in millions):



Three Months Ended December 31, 2023	Pension and other postretirement benefit plan adjustments, net of tax		Accumulated currency translation adjustments, net of tax		Net unrealized losses on cash flow hedges, net of tax		Total accumulated other comprehensive loss, net of tax
Balance as of September 30, 2023	$	(407.1)	$	(364.9)	$	(18.1)	$	(790.1)
Other comprehensive income (loss) before reclassifications	—		84.1		(17.7)		66.4
Amounts reclassified from accumulated other comprehensive loss	0.1		—		(6.2)		(6.1)
Other comprehensive income (loss)	0.1		84.1		(23.9)		60.3
Balance as of December 31, 2023	$	(407.0)	$	(280.8)	$	(42.0)	$	(729.8)



Three Months Ended December 31, 2022	Pension and other postretirement benefit plan adjustments, net of tax		Accumulated currency translation adjustments, net of tax		Net unrealized losses on cash flow hedges, net of tax		Total accumulated other comprehensive loss, net of tax
Balance as of September 30, 2022	$	(447.8)	$	(465.0)	$	(4.7)	$	(917.5)
Other comprehensive income (loss) before reclassifications	—		85.9		(12.0)		73.9
Amounts reclassified from accumulated other comprehensive loss	(0.5)		—		(9.1)		(9.6)
Other comprehensive (loss) income	(0.5)		85.9		(21.1)		64.3
Balance as of December 31, 2022	$	(448.3)	$	(379.1)	$	(25.8)	$	(853.2)

Three Months Ended December 31, 2017
Pension and other postretirement benefit plan adjustments, net of tax Accumulated currency translation adjustments, net of tax Net unrealized gains (losses) on cash flow hedges, net of tax Net unrealized gains (losses) on available-for-sale investments, net of tax Total accumulated other comprehensive loss, net of tax
Balance as of September 30, 2017 $ (927.0 ) $ (237.7 ) $ (14.4 ) $ (0.1 ) $ (1,179.2 )
Other comprehensive loss before reclassifications —
(16.1 ) (3.4 ) (1.1 ) (20.6 )
Amounts reclassified from accumulated other comprehensive loss 20.2
—
3.9
—
24.1
Other comprehensive income (loss) 20.2
(16.1 ) 0.5
(1.1 ) 3.5
Balance as of December 31, 2017 $ (906.8 ) $ (253.8 ) $ (13.9 )
$ (1.2 ) $ (1,175.7 )

~~Changes in accumulated other comprehensive loss by component for the~~ ~~three~~ ~~months ended December 31, 2016, were (in millions):~~

Three Months Ended December 31, 2016
Pension and other postretirement benefit plan adjustments, net of tax Accumulated currency translation adjustments, net of tax Net unrealized gains (losses) on cash flow hedges, net of tax Net unrealized gains (losses) on available-for-sale investments, net of tax Total accumulated other comprehensive loss, net of tax
Balance as of September 30, 2016 $ (1,239.8 ) $ (294.9 ) $ (4.1 ) $ —
$ (1,538.8 )
Other comprehensive income (loss) before reclassifications 0.7
(86.2 ) 11.8
—
(73.7 )
Amounts reclassified from accumulated other comprehensive loss 23.8
—
(0.2 ) —
23.6
Other comprehensive income (loss) 24.5
(86.2 ) 11.6
—
(50.1 )
Balance as of December 31, 2016 $ (1,215.3 ) $ (381.1 ) $ 7.5
$ —

$ (1,588.9 )

Table of Contents

ROCKWELL AUTOMATION, INC.

NOTES TO ~~CONDENSED~~ CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

~~10. Accumulated Other Comprehensive Loss (continued)~~

The reclassifications out of ~~accumulated~~Accumulated other comprehensive loss toin the ~~Condensed~~ Consolidated Statement of Operations were (in millions):


	Three Months Ended December 31,				Affected Line in the Consolidated Statement of Operations
	2023		2022
Pension and other postretirement benefit plan adjustments (1)

Amortization of net actuarial loss (gain)	$	0.1	$	(0.9)		Other income

	0.1		(0.9)			Income before income taxes
	—		0.4			Income tax provision
	$	0.1	$	(0.5)		Net income attributable to Rockwell Automation, Inc.

Net unrealized (gains) losses on cash flow hedges
Forward exchange contracts	$	(1.3)	$	(1.0)		Sales
Forward exchange contracts	(8.1)		(12.9)			Cost of sales
Forward exchange contracts	—		0.3			Selling, general and administrative expenses
Treasury locks related to 2019 and 2021 debt issuances	0.9		0.9			Interest expense
	(8.5)		(12.7)			Income before income taxes
	2.3		3.6			Income tax provision
	$	(6.2)	$	(9.1)		Net income attributable to Rockwell Automation, Inc.

Total reclassifications	$	(6.1)	$	(9.6)		Net income attributable to Rockwell Automation, Inc.

Three Months Ended
December 31, Affected Line in the Condensed Consolidated Statement of Operations
2017 2016
Pension and other postretirement benefit plan adjustments:
Amortization of prior service credit $ (1.1 ) $ (2.3 ) (a)
Amortization of net actuarial loss 28.7
38.5
(a)
Settlements —
0.2
(a)
27.6
36.4
Income before income taxes
(7.4 ) (12.6 ) Income tax provision
$ 20.2
$ 23.8
Net income

Net unrealized losses (gains) on cash flow hedges:
Forward exchange contracts $ (0.5 ) $ 0.5
Sales
Forward exchange contracts 5.9
(1.0 ) Cost of sales
Forward exchange contracts (0.2 ) 0.3
Selling, general and administrative expenses
5.2
(0.2 ) Income before income taxes
(1.3 ) —
Income tax provision
$ 3.9
$ (0.2 ) Net income

Total reclassifications $ 24.1
$ 23.6
Net income

~~(a) Reclassified from accumulated other comprehensive loss into cost of sales and selling, general and administrative expenses.~~(1) These components are included in the computation of net periodic benefit ~~cost (income).~~cost. See Note 910 for further information.

Table of Contents

ROCKWELL AUTOMATION, INC.

NOTES TO ~~CONDENSED~~ CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

~~11.~~13. Commitments and Contingent Liabilities

Various lawsuits, claims, and proceedings have been or may be instituted or asserted against us relating to the conduct of our business, including those pertaining to product liability, environmental, safety and health, intellectual property, employment, and contract matters. Although the outcome of litigation cannot be predicted with certainty and some lawsuits, claims, or proceedings may be disposed of unfavorably to us, we believe the disposition of matters that are pending or have been asserted will not have a material effect on our business, financial condition, or results of operations. The following outlines additional background for obligations associated with asbestos, divested businesses, and intellectual property.

We (including our subsidiaries) have been named as a defendant in lawsuits alleging personal injury as a result of exposure to asbestos that was used in certain components of our products many years ~~ago.~~ago, including products from divested businesses for which we have agreed to defend and indemnify claims. Currently there are ~~a few thousand claimants in~~ lawsuits that name us as defendants, together with hundreds of other companies. In some cases, the claims involve products from divested businesses, and we are indemnified for most of the costs. However, we have agreed to defend and indemnify asbestos claims associated with products manufactured or sold by our former Dodge mechanical and Reliance Electric motors and motor repair services businesses prior to their divestiture by us, which occurred on January 31, 2007. We are also responsible for half of the costs and liabilities associated with asbestos cases against the former Rockwell International Corporation’s divested measurement and flow control business. But in all cases, for those claimants who do show that they worked with our products or products of divested businesses for which we are responsible, we nevertheless believe we have meritorious defenses, in substantial part due to the integrity of the products, the encapsulated nature of any asbestos-containing components, and the lack of any impairing medical condition ~~on the part of many claimants.~~caused by our products. We defend those cases vigorously. Historically, we have been dismissed from the vast majority of these claims with no payment to claimants.

WeAdditionally, we have maintained insurance coverage that ~~we believe covers~~includes indemnity and defense costs, over and above self-insured retentions, for ~~claims arising from our former Allen-Bradley subsidiary. Our insurance carrier entered into a cost share agreement with us to pay the~~many of these claims. We believe these arrangements will provide substantial ~~majority of~~coverage for future defense and indemnity costs for ~~Allen-Bradley asbestos claims. We believe that this arrangement will continue to provide coverage for Allen-Bradley asbestos claims throughout the remaining life of the asbestos liability.~~

We also have rights to historic insurance policies that provide indemnity and defense costs, over and above self-insured retentions, for claims arising out of certain asbestos liabilities relating to the divested measurement and flow control business. We initiated litigation against several insurers to pursue coverage for these claims, subject to each carrier's policy limits, and the case is now pending in Los Angeles County Superior Court. In September 2016, we entered into settlement agreements with certain insurance company defendants, and we continue to pursue our claims against the remaining defendants. We believe these settlement agreements will continue to provide partial coverage for these asbestos claims ~~throughout~~for many years into the ~~remaining life of asbestos liability.~~

future. The uncertainties of asbestos claim litigation make it difficult to predict accurately the ultimate outcome of asbestos claims. That uncertainty is increased by the possibility of adverse rulings or new legislation affecting asbestos claim litigation or the settlement process. Subject to these uncertainties and based on our experience defending asbestos claims, we do not believe these lawsuits will have a material effect on our business, financial condition, or results of operations.

We have, from time to time, divested certain of our businesses. In connection with these divestitures, certain lawsuits, claims, and proceedings may be instituted or asserted against us related to the period that we owned the businesses, either because we agreed to retain certain liabilities related to these periods or because such liabilities fall upon us by operation of law. In some instances, the divested business has assumed the liabilities; however, it is possible that we might be responsible ~~for satisfying~~to satisfy those liabilities if the divested business is unable to do so. We do not believe these liabilities will have a material effect on our business, financial condition, or results of operations.

In connection with the spin-offs of our former automotive business, semiconductor systems business and avionics and communications business, the spun-off companies have agreed to indemnify us for substantially all contingent liabilities related to the respective businesses, including environmental and intellectual property matters.

In conjunction with the sale of our Dodge mechanical and Reliance Electric motors and motor repair services businesses, we agreed to indemnify Baldor Electric Company for costs and damages related to certain legal, legacy environmental and asbestos matters of these businesses arising before January 31, 2007, for which the maximum exposure would be capped at the amount received for the sale.

~~Table of Contents~~

~~ROCKWELL AUTOMATION, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(Unaudited)~~

~~11. Commitments and Contingent Liabilities (continued)~~

In many countries we provide a limited intellectual property indemnity as part of our terms and conditions of ~~sale. We also~~sale and at times ~~provide limited intellectual property indemnities~~ in other contracts with third ~~parties, such as contracts concerning the development and manufacture of our products.~~parties. As of December 31, ~~2017~~,2023, we were not aware of any material indemnification claims ~~where an unfavorable outcome was~~that were probable or reasonably ~~possible.~~possible of an unfavorable outcome. Historically, claims that have been made under the indemnification agreements have not had a material impact on our business, financial condition, or results of operations; however, to the extent that valid indemnification claims arise in the future, future payments by us could be significant and could have a material adverse effect on our business, financial condition, or results of operations in a particular period.

~~12.~~

Table of Contents

ROCKWELL AUTOMATION, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

14. Income Taxes

At the end of each interim period, we estimate a base effective tax rate that we expect for the full ~~fiscal~~ year based on our most recent forecast of pre-tax income, permanent book and tax differences, and global tax planning strategies. We use this base rate to provide for income taxes on a year-to-date basis, excluding the effect of significant unusual items and items that are reported net of their related tax effects in the period in which they occur.

~~Our base rate reflects a change in the U.S. federal statutory rate from 35 percent to 21 percent resulting from the enactment of the~~ ~~Tax Cuts and Jobs Act of 2017~~ (the “Tax Act”) on December 22, 2017. The rate change is effective for us at the beginning of our fiscal year, using a blended rate for the annual period. As a result, the blended statutory tax rate for our fiscal year 2018 is 24.53 percent.

The effective tax rate was ~~179.4~~18.1 percent infor the three months ended December 31, ~~2017,~~2023, compared to ~~16.7~~19.1 percent infor the three months ended December 31, 2016. The effective tax rate was higher than the U.S. statutory rate of 24.53 percent in the three months ended December 31, 2017, due to discrete tax expenses ($479.7 million or 161.1 percent) resulting from the enactment of the Tax Act which are discussed below.2022. The effective tax rate was lower than the U.S. statutory rate of 3521 percent infor the three months ended December 31, ~~2016 primarily because we benefited from lower non-U.S. tax rates,~~2023, and ~~we also realized a benefit from discrete tax items.~~

The Tax Act requires us to revalue our existing U.S. deferred tax balance to reflect the lower statutory tax rate and pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously deferred from U.S. tax. At December 31, ~~2017, we have not completed our accounting for~~2022, primarily due to the geographical mix of pre-tax income.

An income tax ~~effects~~liability of the Tax Act; however, we have made reasonable estimates of its effects on our existing U.S. deferred tax balance and the transition tax as discussed in more detail below. As a result, we recorded a provisional amount of $94.2$175.3 million related to the ~~effects on our~~ U.S. ~~deferred tax balance and a provisional amount of $385.5 million related to the~~ transition tax ~~both~~under the Tax Cuts and Jobs Act of ~~which are included as a component of income tax expense from continuing operations. Income taxes~~2017 (the "Tax Act") that is payable ~~of $381.2 million related to the transition tax are~~greater than 12 months after December 31, 2023, and September 30, 2023, is recorded ~~within other~~in Other liabilities in the ~~Condensed~~ Consolidated Balance ~~Sheet because they are payable greater than twelve months from December 31, 2017.~~

~~Provisional Amounts~~

We revalued our U.S. deferred tax assets and liabilities based on the rate at which they are expected to reverse in the future, which is either 24.53 percent for reversals in 2018 or 21 percent for reversals in 2019 and subsequent years. However, we are still analyzing certain aspects of the Tax Act and refining our calculations, which could potentially affect the valuation of these balances or potentially give rise to new deferred tax amounts. The provisional amount recorded related to the revaluation of our U.S. deferred tax balance was $94.2 million.

The transition tax is based on our total post-1986 earnings and profits (“E&P”) that were previously deferred from U.S. income tax. We recorded a provisional amount for the transition tax liability for all of our foreign subsidiaries, resulting in an increase in income tax expense of $385.5 million. The Tax Act requires the transition tax to be computed based upon total post-1986 E&P at December 31, 2017, which requires us to make reasonable estimates given our September 30 fiscal year.

The transition tax is applied to the balance of post-1986 E&P at rates of 15.5 percent for cash assets (as defined in the Tax Act) and 8 percent for non-cash assets measured at the higher of the balance at September 30, 2018 or the average of the ending balances at September 30, 2016, and September 30, 2017. Our reasonable estimates will change as a result of adjustments impacting E&P, and distributions and other transactions impacting cash. The Company anticipates that it will complete its accounting for the transition tax at December 31, 2018. These uncertainties form the basis for the Company’s provisional reporting based upon reasonable estimates at December 31, 2017.

~~Table of Contents~~

~~ROCKWELL AUTOMATION, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(Unaudited)~~

The Company has historically accounted for the earnings of its foreign subsidiaries as being indefinitely reinvested under ASC 740-30. As a result of the broad changes to the U.S. international tax system under the Tax Act, the Company will begin to account for substantially all of its non-U.S. subsidiaries as being immediately subject to tax other than in certain limited circumstances. The Company has provided for taxes on the balance of historic and current earnings that may be subject to foreign withholding and U.S. state taxes. For future distributions related to historic earnings, we recorded deferred tax liabilities of $60.5 million related to foreign withholding taxes, and deferred tax assets of $60.5 million related to foreign tax credits attributable to the foreign withholding taxes. These provisional amounts are presented net within deferred income tax assets in the Condensed Consolidated Balance Sheet as of December 31, 2017. We have not yet completed our assessment of whether a portion of these assets and liabilities should be presented as gross amounts.Sheet.

Unrecognized Tax Benefits

The amount of gross unrecognized tax benefits was ~~$27.6 million and $31.1~~$10.8 million at December 31, ~~2017,~~2023, and $9.8 million at September 30, ~~2017, respectively,~~2023, of which the entire amount would reduce our effective tax rate if recognized.

Accrued interest and penalties related to unrecognized tax benefits were ~~$3.9 million and $4.0~~$1.0 million at December 31, ~~2017,~~2023, and $0.9 million at September 30, ~~2017, respectively.~~2023. We recognize interest and penalties related to unrecognized tax benefits in the income tax provision.

We believe it is reasonably possible that the amount of gross unrecognized tax benefits could be reduced by up to ~~$7.4~~$2.3 million in the next 12 months as a result of the resolution of tax matters in various global jurisdictions and the lapses of statutes of limitations. If all of the unrecognized tax benefits were recognized, the net reduction to our income tax provision, including the recognition of interest and penalties and offsetting tax assets, could be up to ~~$5.6~~$3.1 million.

We conduct business globally and are routinely audited by the various tax jurisdictions in which we operate. We are no longer subject to U.S. federal income tax examinations for years before ~~2014~~2018, state and ~~are no longer subject to state,~~ local income tax examinations for years before 2014, and foreign income tax examinations for years before ~~2003~~.

2008.

Table of Contents

ROCKWELL AUTOMATION, INC.

NOTES TO ~~CONDENSED~~ CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

~~13.~~15. Business Segment Information

~~The following tables reflect the sales~~Sales and operating results of our reportable segments were (in millions):

Three Months Ended
December 31,
2017 2016
Sales
Architecture & Software $ 746.9
$ 696.4
Control Products & Solutions 839.7
793.9
Total $ 1,586.6
$ 1,490.3
Segment operating earnings
Architecture & Software $ 224.6
$ 208.6
Control Products & Solutions 130.9
108.0
Total 355.5
316.6
Purchase accounting depreciation and amortization (4.4 ) (5.6 )
General corporate – net (16.2 ) (14.9 )
Non-operating pension costs (5.9 ) (19.8 )
Costs related to unsolicited Emerson proposals (11.2 ) —
Interest expense (20.0 ) (18.7 )
Income before income taxes $ 297.8
$ 257.6


	Three Months Ended December 31,
		2023		2022
Sales
Intelligent Devices		$	927.3	$	936.2
Software & Control		603.6		573.3
Lifecycle Services		521.2		471.5
Total		$	2,052.1	$	1,981.0
Segment operating earnings
Intelligent Devices		$	150.2	$	209.4
Software & Control		151.0		167.3
Lifecycle Services		54.3		24.3
Total		355.5		401.0
Purchase accounting depreciation and amortization		(35.6)		(26.0)
Corporate and other		(40.0)		(27.3)
Non-operating pension and postretirement benefit credit		4.9		12.4
Change in fair value of investments		3.1		140.6

Interest expense, net		(28.3)		(32.8)
Income before income taxes		$	259.6	$	467.9

Among other considerations, we evaluate performance and allocate resources based upon segment operating earnings before ~~income taxes, interest expense, costs related to corporate offices, non-operating pension costs, certain corporate initiatives, gains and losses from the disposition of businesses and~~ purchase accounting depreciation and ~~amortization. We incurred $11.2 million~~amortization, corporate and other, non-operating pension and postretirement benefit credit, change in fair value of ~~third-party advisory fees in connection with our evaluation of unsolicited Emerson acquisition proposals in the first quarter of 2018.~~investments, interest expense, net, and income tax provision. Depending on the product, intersegment sales within a single legal entity are either at cost or cost plus a mark-up, which does not necessarily represent a market price. Sales between legal entities are at an appropriate transfer price. We allocate costs related to shared segment operating activities to the segments ~~using a methodology~~ consistent with the ~~expected benefit.~~methodology used by management to assess segment performance.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareowners of

Rockwell Automation, Inc.

Milwaukee, Wisconsin

Results of Review of Interim Financial Information

We have reviewed the accompanying ~~condensed~~ consolidated balance sheet of Rockwell Automation, Inc. and subsidiaries (the ~~“Company”~~"Company") as of December 31, ~~2017, and~~2023, the related ~~condensed~~ consolidated statements of operations, ~~and~~ comprehensive ~~(loss)~~ income, ~~and~~ cash flows and shareowners’ equity for the three-month periods ended December 31, ~~2017~~2023, and ~~2016~~2022, and the related notes (collectively referred to as the "interim financial information"). ~~These condensed consolidated~~Based on our reviews, we are not aware of any material modifications that should be made to the accompanying interim financial ~~statements are~~information for it to be in conformity with accounting principles generally accepted in the ~~responsibility~~United States of ~~the Company’s management.~~America.

We ~~conducted our reviews~~have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States). (PCAOB), the consolidated balance sheet of the Company as of September 30, 2023, and the related consolidated statements of operations, comprehensive income, cash flows and shareowners’ equity for the year then ended (not presented herein); and in our report dated November 8, 2023, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet as of September 30, 2023, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

Basis for Review Results

This interim financial information is the responsibility of the Company's management. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our reviews in accordance with standards of the PCAOB. A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the ~~Public Company Accounting Oversight Board (United States),~~PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our reviews, we are not aware of any material modifications that should be made to such condensed consolidated interim financial statements for them to be in conformity with accounting principles generally accepted in the United States of America.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet of Rockwell Automation, Inc. and subsidiaries as of September 30, 2017, and the related consolidated statements of operations, comprehensive income, cash flows, and shareowners’ equity for the year then ended (not presented herein); and in our report dated November 15, 2017, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of ~~September 30, 2017~~ ~~is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.~~

/s/ DELOITTE & TOUCHE LLP

Milwaukee, Wisconsin

January 31, ~~2018~~2024

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~~ROCKWELL AUTOMATION, INC.~~

Item 2.Management's Discussion and Analysis of Financial Condition and Results of Operations

Results of Operations

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains statements (including certain projections and business trends) that are “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Words such as “believe”, “estimate”, “project”, “plan”, “expect”, “anticipate”, “will”, “intend”, and other similar expressions may identify forward-looking statements. Actual results may differ materially from those projected as a result of certain risks and uncertainties, many of which are beyond our control, including but not limited to:

•macroeconomic factors, including inflation, global and regional business conditions ~~the availability and cost of capital,~~(including adverse impacts in certain markets, such as Oil & Gas), commodity prices, currency exchange rates, the cyclical nature of our customers’ capital spending, and sovereign debt ~~concerns~~concerns;

•the availability and ~~currency exchange rates;~~price of components and materials;

•the severity and duration of disruptions to our business due to pandemics, natural disasters (including those as a result of climate change), acts of war, strikes, terrorism, social unrest or other causes, liquidity and financial markets, demand for our hardware and software products, solutions, and services, our supply chain, our work force, our liquidity and the value of the assets we own;

•the availability, effectiveness, and security of our information technology systems;

•our ability to attract, develop, and retain qualified employees;

•our ability to manage and mitigate the risk related to security vulnerabilities and breaches of our hardware and software products, solutions, and services;

•the successful integration and management of strategic transactions and achievement of the expected benefits of these transactions;

•laws, regulations, and governmental policies affecting our activities in the countries where we do ~~business;~~business, including those related to tariffs, taxation, trade controls (including sanctions placed on Russia), cybersecurity, and climate change;

•the successful development of advanced technologies and demand for and market acceptance of new and existing hardware and software products;

~~the availability, effectiveness and security of our information technology systems;~~

~~competitive products, solutions and services and pricing pressures, and our ability to provide high quality products, solutions and services;~~

~~a disruption of our business due to natural disasters, pandemics, acts of war, strikes, terrorism, social unrest or other causes;~~

~~our ability to manage and mitigate the risk related to security vulnerabilities and breaches of our products, solutions and services;~~

~~intellectual property infringement claims by others and the ability to protect our intellectual property;~~

~~the uncertainty of claims by taxing authorities in the various jurisdictions where we do business;~~

~~our ability to attract, develop, and retain qualified personnel;~~

~~our ability to manage costs related to employee retirement and health care benefits;~~

~~the uncertainties of litigation, including liabilities related to the safety and security of the products, solutions and services we sell;~~

•our ability to manage and mitigate the risks associated with our solutions and services businesses;

•the successful execution of our cost productivity initiatives;

•competitive hardware and software products, solutions, and services, pricing pressures, and our ability to provide high quality products, solutions, and services;

•the availability and cost of capital;

•disruptions to our distribution channels or the failure of distributors to develop and maintain capabilities to sell our products;

•intellectual property infringement claims by others and the ~~successful integration~~ability to protect our intellectual property;

•the uncertainty of claims by taxing authorities in the various jurisdictions where we do business;

•the uncertainties of litigation, including liabilities related to the safety and ~~management~~security of ~~acquired businesses~~the hardware and ~~technologies;~~software products, solutions, and services we sell;

~~the availability~~•our ability to manage costs related to employee retirement and ~~price of components~~health care benefits; and ~~materials;~~

~~the successful execution of our cost productivity initiatives; and~~

•other risks and uncertainties, including but not limited to those detailed from time to time in our Securities and Exchange Commission (SEC) filings.

These forward-looking statements reflect our beliefs as of the date of filing this report. We undertake no obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise. See Item ~~1A,~~ 1A. Risk Factors, of our Annual Report on Form 10-K for the ~~fiscal~~ year ended September 30, ~~2017~~,2023, for more information.

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Non-GAAP Measures

The following discussion includes organic sales, total segment operating earnings and margin, ~~Adjusted Income, Adjusted~~adjusted income, adjusted EPS, ~~Adjusted Effective Tax Rate~~adjusted effective tax rate, and free cash flow, which are non-GAAP measures. See Supplemental Sales Information for a reconciliation of reported sales to organic sales and a discussion of why we believe this non-GAAP measure is useful to investors. See Summary of Results of ~~Operations~~Operations for a reconciliation ~~of income~~of Income before income taxes to total segment operating earnings and margin and a discussion of why we believe these ~~non-GAAP~~non-GAAP measures are useful to investors. See ~~Results of Operations~~ ~~for a reconciliation of income from continuing operations, diluted EPS from continuing operations and effective tax rate to~~ Adjusted Income, Adjusted EPS, and Adjusted Effective Tax Rate Reconciliation for a reconciliation of Net income attributable to Rockwell Automation, diluted EPS, and effective tax rate to adjusted income, adjusted EPS, and adjusted effective tax rate, respectively, and a discussion of why we believe these ~~non-GAAP~~non-GAAP measures are useful to investors. See Financial Condition for a reconciliation of ~~cash flows from~~Cash provided by operating activities to free cash flow and a ~~discussion~~discussion of why we believe this non-GAAP measure is useful to investors.

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~~ROCKWELL AUTOMATION, INC.~~

Overview

Rockwell Automation, Inc.~~, a leader in~~ is the world’s largest company dedicated to industrial automation and ~~information, makes its customers more productive and the world more sustainable.~~digital transformation. Overall demand for our hardware and software products, solutions, and services is driven by:

•investments in manufacturing, including new facilities or production lines, upgrades, modifications and expansions of existing facilities or production ~~lines and new facilities or production~~ lines;

•investments in basic materials production capacity, which may be related to commodity pricing levels;

•our customers’ needs for faster time to market, ~~lower total cost of ownership, improved~~agility to address evolving consumer preferences, operational productivity, asset ~~utilization~~management and ~~optimization,~~reliability, and business resilience, including security and enterprise risk management;

•our customers’ needs to continuously improve quality, safety, and sustainability;

•industry factors that include our customers’ new product introductions, demand for our customers’ products or services, and the regulatory and competitive environments in which our customers operate;

•levels of global industrial production and capacity utilization;

•regional factors that include local political, social, regulatory, and economic circumstances; and

•the spending patterns of our customers due to their annual budgeting processes and their working schedules.

Long-term Strategy

Our strategy is to expand human possibility. Our vision is to create the future of industrial operations. As the world’s largest company dedicated to industrial automation and digital transformation, our strategy is to bring ~~The~~the Connected Enterprise® to life. We ~~integrate control~~understand and ~~information across the enterprise to help industrial companies~~simplify our customers’ complex production challenges and ~~their people be more productive. Our vision of being~~deliver the most valued ~~global provider~~solutions that combine technology and industry expertise. As a result, we make our customers more resilient, agile, and sustainable, creating more ways to win. We deliver value by helping our customers optimize production, build resilience, empower people, become more sustainable, and accelerate transformation.

Rockwell Automation stands at the intersection of ~~innovative~~the technological and societal trends that are shaping the future of industrial ~~automation~~operations. We see converging megatrends including digitization and ~~information products, solutions~~artificial intelligence, energy transition and ~~services is supported by~~sustainability, shifting demographics, and an increased need for resiliency.

Our long-term profitable growth framework outlines how we will deliver accelerated growth while we continue to transform our ~~growth and performance strategy, which seeks to:~~company to meet stakeholder expectations over the longer term:

•achieve ~~organic sales~~faster secular growth in ~~excess~~traditional markets due to customer needs for resiliency (including cybersecurity), agility, sustainability, and mitigating impacts of ~~the automation~~labor shortages;

•grow share and create new ways to win through technology differentiation, industry focus, go to market ~~by expanding our served market~~acceleration, expanded offerings and ~~strengthening our competitive differentiation;~~new markets;

~~diversify our sales streams by broadening our portfolio of products, solutions~~•accelerate growth in annual recurring revenue;

•add 1% growth from acquisitions annually; and ~~services, expanding our global presence and serving~~

•deliver profitable growth within a ~~wider range of industries and applications;~~

~~grow market share by gaining new customers and by capturing a larger share of existing customers’ spending;~~

~~enhance our market access by building our channel capability and partner network;~~

~~acquire companies that serve as catalysts to organic growth by adding complementary technology, expanding our served market, or enhancing our domain expertise or market access;~~

~~deploy human and~~disciplined financial ~~resources to strengthen our technology leadership and our intellectual capital business model;~~

~~continuously improve quality and customer experience; and~~

~~drive annual cost productivity.~~

By implementing the above strategy, we seek to achieve our long-term financial goals, including above-market organic sales growth, EPS growth above sales growth, return on invested capital in excess of 20 percent and free cash flow equal to about 100 percent of Adjusted Income. We expect acquisitions to add a percentage point or more per year, on average, to long-term sales growth.

framework.

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~~ROCKWELL AUTOMATION, INC.~~

~~U. S. Industrial~~U.S. Economic Trends

In the first quarter of ~~2018~~,2024, sales in the U.S. accounted for ~~54 percent~~over half of our total sales. The various indicators we use to gauge the direction and momentum of our served U.S. markets include:

•The Industrial Production (IP) Index, published by the Federal Reserve, which measures the real output of manufacturing, mining, and electric and gas utilities. The IP Index is expressed as a percentage of real output in a base year, currently ~~2012. Historically, there has been a meaningful correlation between the changes in the IP Index and the level of automation investment made by our U.S. customers in their manufacturing base.~~2017.

•The Manufacturing Purchasing Managers’ Index (PMI), published by the Institute for Supply Management (ISM), which indicates the current and near-term state of manufacturing activity in the U.S. According to the ISM, a PMI measure above 50 indicates that the U.S. manufacturing economy is generally expanding while a measure below 50 indicates that it is generally contracting.

Industrial Equipment Spending, compiled by the Bureau of Economic Analysis, which provides insight into spending trends in the broad U.S. industrial economy. This measure over the longer term has proven to demonstrate a reasonable correlation with our domestic growth.

Capacity Utilization (Total Industry), published by the Federal Reserve, which measures plant operating activity. Historically, there has been a meaningful correlation between Capacity Utilization and levels of U.S. IP.

The table below depicts trends in these indicators since the quarter ended September ~~2016. In the first quarter~~2022. These figures are as of fiscal 2018, most of these U.S. economic indicators improved compared to the prior quarter. PMI declined slightly, but remained above 50, indicating a continued expansion in the U.S. manufacturing economy.

IP
Index
PMI
Industrial
Equipment
Spending
(in billions)

Capacity
Utilization
(percent)
Fiscal 2018 quarter ended:
December 2017 106.9
59.7
249.3
77.5
Fiscal 2017 quarter ended:
September 2017 104.8
60.8
246.7
76.2
June 2017 105.1
57.8
241.7
76.6
March 2017 103.7
57.2
234.3
75.8
December 2016 103.3
54.5
229.0
75.8
Fiscal 2016 quarter ended:
September 2016 103.1
51.7
226.0
75.8

~~Note: Economic indicators~~January 31, 2024, and are subject to revision by the issuing organizations. The IP index declined in the first quarter of fiscal 2024 versus the fourth quarter of fiscal 2023. Manufacturing PMI results remained soft in the first quarter of 2024.

~~While we are optimistic that~~


	IP Index	PMI
Fiscal 2024 quarter ended:
December 2023	99.0	47.4
Fiscal 2023 quarter ended:
September 2023	99.6	49.0
June 2023	99.9	46.0
March 2023	99.5	46.3
December 2022	99.6	48.4
Fiscal 2022 quarter ended:
September 2022	100.4	50.9

Inflation in the ~~impact of~~ U.S. ~~tax reform~~has also had an impact on our ~~customers' investment decisions could provide an additional tailwind~~input costs and pricing. We used the Producer Price Index (PPI), published by the Bureau of Labor Statistics, which measures the average change over time in the selling prices received by domestic producers for their output. PPI growth has remained in the low single digits during the first quarter, consistent with most of 2023. Producer prices remain elevated, however, year over year increases continued to ~~our future performance, it is too early to quantify the benefits.~~

decelerate following last years' surge in prices.

Non-U.S. Economic Trends

In the first quarter of ~~2018,~~2024, sales to customers outside the U.S. accounted for ~~46 percent~~less than half of our total sales. These customers include both indigenous companies and multinational companies with ~~expanding~~a global presence. In addition to the global factors previously mentioned in the ~~"Overview"~~Overview section, international demand, particularly in emerging markets, has historically been driven by the strength of the industrial economy in each region, investments in infrastructure, and expanding consumer markets. We use changes in ~~the respective~~key countries' gross domestic product (GDP), IP, and IPPMI as indicators of the growth opportunities in each region where we do business.

~~Economic projections call for growth~~ Industrial output was mostly higher outside the U.S. in ~~industrial production in all regions in~~the first quarter of fiscal ~~2018. In EMEA, economic growth is supported by solid global growth that will help exports. In Asia Pacific, China's economy is stable~~2024 versus the fourth quarter of 2023. Manufacturing PMI readings were mostly lower and ~~economic growth in India is forecasted~~many countries continue to improve following the prior year impacts of demonetization and a new goods and services tax. In Latin America, continued economic recovery is expected in Brazil, though the economic outlook in Mexico is being impacted by a tightening in fiscal and monetary policies, and some uncertainty related to NAFTA renegotiations.

report readings below 50.

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~~ROCKWELL AUTOMATION, INC.~~

Supply Chain

We have a global supply chain, including a network of suppliers and distribution and manufacturing facilities, that play a critical role in serving our channel partners and customers. Recent supply chain challenges have resulted in and could continue to result in:

•difficulty in procuring or inability to procure components and materials necessary for our products, solutions, and services;

•increased costs for commodities and components; and

•delays in delivering, or an inability to deliver, our products, solutions, and services.

We are continuing to see improvement in our supply chain environment and are closely managing our end-to-end supply chain, from sourcing to production to customer delivery, with a particular focus on all critical and at-risk suppliers and supplier locations globally. Actions we have taken include:

•extending order visibility to our supply base to ensure we are appropriately planning for extended component lead times;

•securing longer-term supply agreements with critical partners;

•re-engineering of existing products to increase component supply resiliency;

•investing in capacity, including redundant manufacturing lines and additional electronic assembly equipment;

•qualification of additional suppliers to diversify our supplier base; and

•adapting logistics to secure additional capacity.

We believe these actions are enabling us to normalize our product lead times and better serve our customers.

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Summary of Results of Operations

~~Sales in the~~ ~~first~~ ~~quarter of~~ ~~2018increased6.5 percent~~ ~~compared to the~~ ~~first~~ ~~quarter of~~ ~~2017~~. Organic sales increased 5.3 percent year over year. Currency translation increased sales by 2.5 percentage points, and the prior year divestiture reduced sales growth by 1.3 percentage points. Growth was broad-based across regions. Heavy industries had the strongest growth.

~~The following is a summary of our results related to key growth initiatives:~~

~~Logix sales increased 9 percent year over year in the~~ ~~first~~ ~~quarter of~~ ~~2018. Logix organic sales increased 6 percent year over year, and currency translation increased sales by 3 percentage points.~~

~~Process initiative sales increased 13 percent year over year in the~~ ~~first~~ ~~quarter of~~ ~~2018. Process initiative organic sales increased 12 percent year over year, and currency translation increased sales by one percentage point.~~

~~Sales in emerging countries increased 11.2 percent year over year in the~~ ~~first~~ ~~quarter of~~ ~~2018~~. Organic sales in emerging countries increased 8.5 percent year over year. Currency translation increased sales in emerging countries by 3.3 percentage points, and the prior year divestiture reduced sales growth by 0.6 percentage points.

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~~ROCKWELL AUTOMATION, INC.~~

The following table reflects our sales and operating results ~~for the~~ ~~three~~ ~~months ended~~ ~~December 31, 2017~~ ~~and~~ ~~2016~~(in millions, except per share amounts and percentages):


	Three Months Ended December 31,
		2023			2022
Sales
Intelligent Devices (a)		$	927.3		$	936.2
Software & Control (b)		603.6			573.3
Lifecycle Services (c)		521.2			471.5
Total sales (d)		$	2,052.1		$	1,981.0
Segment operating earnings (1)
Intelligent Devices (e)		$	150.2		$	209.4
Software & Control (f)		151.0			167.3
Lifecycle Services (g)		54.3			24.3
Total segment operating earnings (2) (h)		355.5			401.0
Purchase accounting depreciation and amortization		(35.6)			(26.0)
Corporate and other		(40.0)			(27.3)
Non-operating pension and postretirement benefit credit		4.9			12.4
Change in fair value of investments		3.1			140.6

Interest expense, net		(28.3)			(32.8)
Income before income taxes (i)		259.6			467.9
Income tax provision		(46.9)			(89.2)
Net income		212.7			378.7
Net loss attributable to noncontrolling interests		(2.5)			(5.3)
Net income attributable to Rockwell Automation		$	215.2		$	384.0




Diluted EPS		$	1.86		$	3.31

Adjusted EPS (3)		$	2.04		$	2.46

Diluted weighted average outstanding shares		115.2			115.5

Pre-tax margin (i/d)		12.7		%	23.6		%

Intelligent Devices segment operating margin (e/a)		16.2		%	22.4		%
Software & Control segment operating margin (f/b)		25.0		%	29.2		%
Lifecycle Services segment operating margin (g/c)		10.4		%	5.2		%
Total segment operating margin (2) (h/d)		17.3		%	20.2		%

Three Months Ended
December 31,
2017 2016
Sales
Architecture & Software $ 746.9
$ 696.4
Control Products & Solutions 839.7
793.9
Total sales (a) 1,586.6
$ 1,490.3
Segment operating earnings⁽¹⁾

Architecture & Software 224.6
$ 208.6
Control Products & Solutions 130.9
108.0
Total segment operating earnings⁽²⁾ (b)
355.5
316.6
Purchase accounting depreciation and amortization (4.4 ) (5.6 )
General corporate — net (16.2 ) (14.9 )
Non-operating pension costs (5.9 ) (19.8 )
Costs related to unsolicited Emerson proposals (11.2 ) —
Interest expense (20.0 ) (18.7 )
Income before income taxes (c) 297.8
257.6
Income tax provision (534.2 ) (42.9 )
Net (loss) income (236.4 ) $ 214.7

Diluted EPS $ (1.84 ) $ 1.65

Adjusted EPS⁽³⁾
$ 1.96
$ 1.75

Diluted weighted average outstanding shares for diluted EPS 128.2
129.7

Diluted weighted average outstanding shares for adjusted EPS⁽³⁾
130.1
129.7

Total segment operating margin⁽²⁾ (b/a)
22.4 % 21.2 %

Pre-tax margin (c/a) 18.8 % 17.3 %
(1) See Note 15 in the Consolidated Financial Statements for the definition of segment operating earnings.

(2) Total segment operating earnings and total segment operating margin are non-GAAP financial measures. We exclude purchase accounting depreciation and amortization, corporate and other, non-operating pension and postretirement benefit credit, change in fair value of investments, interest expense, net, and income tax provision because we do not consider these items to be directly related to the operating performance of our segments. We believe total segment operating earnings and total segment operating margin are useful to investors as measures of operating performance. We use these measures to monitor and evaluate the profitability of our operating segments. Our measures of total segment operating earnings and total segment operating margin may be different from measures used by other companies.


~~(1)~~	~~See Note 13 in the Condensed Consolidated Financial Statements for the definition of segment operating earnings.~~

~~(2)~~

Total segment operating earnings and total segment operating margin are non-GAAP financial measures. We exclude purchase accounting depreciation and amortization, general corporate – net, non-operating pension costs, costs related to the unsolicited Emerson proposals, interest expense and income tax provision because we do not consider these costs to be directly related to the operating performance of our segments. We believe that these measures are useful to investors as measures of operating performance. We use these measures to monitor and evaluate the profitability of our operating segments. Our measures of total segment operating earnings and total segment operating margin may be different from measures used by other companies.

~~(3)~~

Adjusted EPS is a non-GAAP earnings measure that excludes the non-operating pension costs and their related income tax effects, costs related to the unsolicited Emerson proposals in the first quarter of fiscal 2018 and their related tax effects, and the provisional tax effect of deemed repatriation of foreign earnings and the revaluation of net deferred tax assets due to the enactment of the Tax Cuts and Jobs Act of 2017 (the "Tax Act"). See ~~Adjusted Income, Adjusted EPS and Adjusted Effective Tax Rate Reconciliation~~ for more information on this non-GAAP measure. Average diluted shares for adjusted EPS is a non-GAAP measure that includes 1.9 million of dilutive shares that are excluded from GAAP average diluted shares in the first quarter of fiscal 2018 because we recorded a net loss.

(3) Adjusted EPS is a non-GAAP earnings measure. See Adjusted Income, Adjusted EPS, and Adjusted Effective Tax Rate Reconciliation for more information on this non-GAAP measure.

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~~ROCKWELL AUTOMATION, INC.~~

Three Months EndedDecember 31, 2023, Compared to Three Months Ended December 31, 2022

Sales

Sales increased 3.6 percent year over year in the three months ended December 31, 2023. Organic sales increased 1.0 percent, currency translation increased sales by 1.2 percentage points, and acquisitions increased sales by 1.4 percentage points year over year in the three months ended December 31, 2023. Pricing increased total company sales by approximately 3 percentage points, realized in the Intelligent Devices and Software & Control segments. Volume decreased total company sales by approximately 2 percentage points.

The table below presents our sales, attributed to the geographic regions based upon country of destination, and the percentage change from the same period a year ago (in millions, except percentages). Asia Pacific was negatively impacted by the results of China, which experienced a high teens decrease in reported and organic sales.


			Change vs.		Change in Organic Sales (1) vs.
	Three Months Ended December 31, 2023		Three Months Ended December 31, 2022		Three Months Ended December 31, 2022
North America	$	1,247.1	5.8	%	4.2	%
Europe, Middle East, and Africa	388.3		4.2	%	(2.2)	%
Asia Pacific	275.6		(7.0)	%	(7.4)	%
Latin America	141.1		6.2	%	(0.5)	%
Total Company Sales	$	2,052.1	3.6	%	1.0	%

(1) Organic sales and organic sales growth exclude the effect of acquisitions, changes in currency exchange rates, and divestitures. See Supplemental Sales Information for information on these non-GAAP measures.

Corporate and Other

Corporate and other expenses were $40.0 million in the three months ended December 31, 2023, compared to $27.3 million in the three months ended December 31, 2022. The increase includes the year over year impact of costs associated with the acquisition of Clearpath and mark-to-market adjustments related to our deferred and non-qualified compensation plans.

Income before Income Taxes

Income before income taxes was $259.6 million in the three months ended December 31, 2023, compared to $467.9 million in the three months ended December 31, 2022. The decrease was primarily due to the mark-to-market gains recognized in the first quarter of the prior year related to our previous investment in PTC and lower segment operating earnings.

Total segment operating earnings decreased 11.3 percent in the three months ended December 31, 2023, primarily due to higher investment spend and lower supply chain utilization.

Income Taxes

The effective tax rate for the three months ended December 31, 2023, was 18.1 percent compared to 19.1 percent for the three months ended December 31, 2022. The decrease in the effective tax rate was primarily due to tax effects in the prior year related to our previous investment in PTC. Our adjusted effective tax rate for the three months ended December 31, 2023, was 17.9 percent compared to 17.1 percent for the three months ended December 31, 2022. The increase in the adjusted effective tax rate was primarily due to the geographical mix of pre-tax income.

Diluted EPS and Adjusted EPS

2024 first quarter Net income attributable to Rockwell Automation was $215.2 million or $1.86 per share, compared to $384.0 million or $3.31 per share in the first quarter of 2023. The decreases in Net income attributable to Rockwell Automation and diluted EPS were primarily due to lower pre-tax margin. Pre-tax margin was 12.7 percent in the first quarter of 2024 compared to 23.6 percent in the same period last year. The decrease in pre-tax margin was primarily due to mark-to market gains recognized in the first quarter of the prior year related to our previous investment in PTC and lower segment operating earnings. 2024 first quarter adjusted EPS was $2.04, down 17.1 percent compared to $2.46 in the first quarter of 2023, primarily due to lower segment operating margin. Total segment operating margin in the first quarter of 2024 was 17.3 percent compared to 20.2 percent a year ago, primarily due to higher investment spend and lower supply chain utilization.

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Intelligent Devices

Sales

Intelligent Devices sales decreased 1.0 percent year over year in the three months ended December 31, 2023. Organic sales decreased 4.5 percent year over year, the effects of currency translation increased sales by 1.2 percentage points year over year, and acquisitions increased sales by 2.3 percentage points year over year in the three months ended December 31, 2023. For the three months ended December 31, 2023, reported and organic sales decreased in all regions, except for North America.

Segment Operating Margin

Intelligent Devices segment operating earnings decreased 28.3 percent year over year in the three months ended December 31, 2023. Segment operating margin decreased to 16.2 percent in the three months ended December 31, 2023, from 22.4 percent in the same period a year ago, primarily due to lower sales volume, timing of prior-year investment spend, and the impact of acquisitions, partially offset by positive impact of price realization exceeding input costs.

Software & Control

Sales

Software & Control sales increased 5.3 percent year over year in the three months ended December 31, 2023. Organic sales increased 4.0 percent year over year and the effects of currency translation increased sales by 1.3 percentage points year over year in the three months ended December 31, 2023. For the three months ended December 31, 2023, all regions experienced reported and organic sales growth.

Segment Operating Margin

Software & Control segment operating earnings decreased 9.7 percent year over year in the three months ended December 31, 2023. Segment operating margin decreased to 25.0 percent in the three months ended December 31, 2023, from 29.2 percent in the same period a year ago, primarily due to timing of prior-year investment spend and lower supply chain utilization, partially offset by positive impact of price realization exceeding input costs.

Lifecycle Services

Sales

Lifecycle Services sales increased 10.5 percent year over year in the three months ended December 31, 2023. Organic sales increased 8.1 percent year over year, the effects of currency translation increased sales by 1.0 percentage point year over year, and acquisitions increased sales by 1.4 percentage points year over year in the three months ended December 31, 2023. For the three months ended December 31, 2023, all regions experienced reported sales growth. Organic sales increased in North America and Latin America, but decreased in Europe, Middle East, and Africa and Asia Pacific in the three months ended December 31, 2023.

Segment Operating Margin

Lifecycle Services segment operating earnings increased 123.5 percent year over year in the three months ended December 31, 2023. Segment operating margin increased to 10.4 percent in the three months ended December 31, 2023, from 5.2 percent in the same period a year ago, primarily due to higher sales volume, lower incentive compensation, and higher margins in Sensia.

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Supplemental Segment Information

Purchase accounting depreciation and amortization and non-operating pension ~~costs~~and postretirement benefit cost are not allocated to our operating segments because these costs are excluded from our measurement of each segment's operating performance for internal purposes. If we were to allocate these costs, we would attribute them to each of our segments as follows (in millions):

Three Months Ended
December 31,
2017 2016
Purchase accounting depreciation and amortization
Architecture & Software $ 1.6
$ 1.6
Control Products & Solutions 2.5
3.8
Non-operating pension costs
Architecture & Software 1.8
7.1
Control Products & Solutions 2.8
11.1

The decreases in non-operating pension costs in both segments for the three months ended December 31, 2017, were primarily due to a $200 million voluntary contribution in fiscal 2017 and other actuarial adjustments.


	Three Months Ended December 31,
	2023		2022
Purchase accounting depreciation and amortization
Intelligent Devices	$	9.3	$	1.0
Software & Control	17.0		16.9
Lifecycle Services	9.1		7.8
Non-operating pension and postretirement benefit credit
Intelligent Devices	$	(1.8)	$	(3.9)
Software & Control	(1.8)		(3.9)
Lifecycle Services	(2.4)		(5.3)

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~~ROCKWELL AUTOMATION, INC.~~

Adjusted Income, Adjusted EPS, and Adjusted Effective Tax Rate Reconciliation

Adjusted ~~Income, Adjusted~~income, adjusted EPS, and ~~Adjusted Effective Tax Rate~~adjusted effective tax rate are non-GAAP earnings measures that exclude non-operating pension ~~costs~~ and postretirement benefit credit, purchase accounting depreciation and amortization attributable to Rockwell Automation, change in fair value of investments, and Net loss attributable to noncontrolling interests, including their ~~related income~~respective tax effects, costs related to the unsolicited Emerson proposals in the first quarter of fiscal 2018 and their related tax effects, and the provisional tax effect of deemed repatriation of foreign earnings and the revaluation of net deferred tax assets due to the enactment of the Tax Cuts and Jobs Act of 2017 (the "Tax Act").effects. Non-operating pension ~~costs include~~and postretirement benefit credit is defined ~~benefit plan interest cost, expected return on plan assets, amortization~~as all components of ~~actuarial gains and losses and the impact of any plan curtailments or settlements. These components of~~our net periodic pension and postretirement benefit cost ~~primarily relate to changes~~(credit) except for service cost. See Note 10 in the Consolidated Financial Statements for more information on our net periodic pension ~~assets~~ and ~~liabilities that are a result of market performance; we consider these and other excluded costs to be unrelated to the operating performance of our business.~~ postretirement benefit cost.

We believe that ~~Adjusted Income, Adjusted~~adjusted income, adjusted EPS, and ~~Adjusted Effective Tax Rate~~adjusted effective tax rate provide useful information to our investors about our operating performance and allow management and investors to compare our operating performance period over period. Adjusted EPS is also used as a financial measure of performance for our annual incentive compensation. Our measures of ~~Adjusted Income, Adjusted~~adjusted income, adjusted EPS, and ~~Adjusted Effective Tax Rate~~adjusted effective tax rate may be different from measures used by other companies. These non-GAAP measures should not be considered a substitute for Net income ~~from continuing operations,~~attributable to Rockwell Automation, diluted EPS, and effective tax rate.

~~The following are the components of operating and non-operating pension costs for the~~ ~~three~~ ~~months ended~~ ~~December 31, 2017~~ ~~and~~ ~~2016~~ ~~(in millions):~~

Three Months Ended
December 31,
2017 2016
Service cost $ 22.2
$ 24.1
Amortization of prior service credit 0.2
(0.8 )
Operating pension costs 22.4
23.3

Interest cost 38.8
37.8
Expected return on plan assets (61.2 ) (56.2 )
Amortization of net actuarial loss 28.3
38.0
Settlements —
0.2
Non-operating pension costs 5.9

19.8

Net periodic pension cost $ 28.3
$ 43.1

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~~ROCKWELL AUTOMATION, INC.~~

The following are reconciliations of Net income ~~from continuing operations,~~attributable to Rockwell Automation, diluted EPS, ~~from continuing operations~~ and effective tax rate to ~~Adjusted Income, Adjusted~~adjusted income, adjusted EPS, and ~~Adjusted Effective Tax Rate,~~adjusted effective tax rate, respectively ~~for the~~ ~~three~~ ~~months ended~~ ~~December 31, 2017~~ ~~and~~ ~~2016~~ (in millions, except per share amounts and percentages):


	Three Months Ended December 31,
		2023			2022
Net income attributable to Rockwell Automation		$	215.2		$	384.0
Non-operating pension and postretirement benefit credit		(4.9)			(12.4)
Tax effect of non-operating pension and postretirement benefit credit		1.0			2.8
Purchase accounting depreciation and amortization attributable to Rockwell Automation		32.7			23.0
Tax effect of purchase accounting depreciation and amortization attributable to Rockwell Automation		(5.5)			(5.6)
Change in fair value of investments (1)		(3.1)			(140.6)
Tax effect of change in fair value of investments (1)		0.6			34.1
Adjusted income		$	236.0		$	285.3

Diluted EPS		$	1.86		$	3.31
Non-operating pension and postretirement benefit credit		(0.04)			(0.10)
Tax effect of non-operating pension and postretirement benefit credit		0.01			0.02
Purchase accounting depreciation and amortization attributable to Rockwell Automation		0.28			0.20
Tax effect of purchase accounting depreciation and amortization attributable to Rockwell Automation		(0.05)			(0.05)
Change in fair value of investments (1)		(0.03)			(1.22)
Tax effect of change in fair value of investments (1)		0.01			0.30
Adjusted EPS		$	2.04		$	2.46

Effective tax rate		18.1		%	19.1		%
Tax effect of non-operating pension and postretirement benefit credit		(0.1)		%	(0.1)		%
Tax effect of purchase accounting depreciation and amortization attributable to Rockwell Automation		(0.1)		%	0.5		%
Tax effect of change in fair value of investments (1)		—		%	(2.4)		%
Adjusted effective tax rate		17.9		%	17.1		%

Three Months Ended
December 31,
2017
2016
(Loss) Income from continuing operations $ (236.4 ) $ 214.7
Non-operating pension costs 5.9
19.8
Tax effect of non-operating pension costs (1.8 ) (7.2 )
Costs related to unsolicited Emerson proposals 11.2
—
Tax effect of costs related to unsolicited Emerson proposals (3.1 ) —
Effect of deemed repatriation of foreign earnings due to the Tax Act¹
385.5
—
Effect of net deferred tax asset revaluation due to the Tax Act¹
94.2
—
Adjusted Income $ 255.5
$ 227.3

Diluted EPS from continuing operations $ (1.84 ) $ 1.65
Non-operating pension costs per diluted share 0.06
0.15
Tax effect of non-operating pension costs per diluted share (0.01 ) (0.05 )
Costs related to unsolicited Emerson proposals 0.09
—
Tax effect of costs related to unsolicited Emerson proposals (0.02 ) —
Effect of deemed repatriation of foreign earnings due to the Tax Act¹
2.96
—
Effect of net deferred tax asset revaluation due to the Tax Act¹
0.72
—
Adjusted EPS $ 1.96
$ 1.75

Effective tax rate 179.4 % 16.7 %
Tax effect of non-operating pension costs 0.3 % 1.4 %
Tax effect of costs related to unsolicited Emerson proposals 0.3 % — %
Effect of deemed repatriation of foreign earnings due to the Tax Act¹
(129.5 )% — %
Effect of net deferred tax asset revaluation due to the Tax Act¹
(31.6 )% — %
Adjusted Effective Tax Rate 18.9 % 18.1 %

¹These amounts, which are based on reasonable estimates, will require further adjustments as additional guidance from the U.S. Department of Treasury is provided, the Company’s assumptions change, or as further information and interpretations become available. ~~Refer to Note 12 in the Condensed Consolidated Financial Statements for further information regarding the effect of the enactment of the Tax Act on our financial condition and results of operations.~~

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~~ROCKWELL AUTOMATION, INC.~~

~~Three Months EndedDecember 31, 2017, Compared to Three Months Ended December 31, 2016~~

Three Months Ended December 31,
(in millions, except per share amounts) 2017 2016 Change
Sales $ 1,586.6
$ 1,490.3
$ 96.3
Income before income taxes 297.8
257.6
40.2
Diluted EPS (1.84 ) 1.65
(3.49 )
Adjusted EPS 1.96
1.75
0.21

~~Sales~~

~~Sales~~ ~~increased~~ ~~6.5 percent~~(1) Amount in the three months ended December 31, 2017. Organic sales increased 5.3 percent year over year. Currency translation increased sales by 2.5 percentage points, and the prior year divestiture reduced sales growth by 1.3 percentage points in the three months ended December 31, 2017.

~~Pricing contributed less than one percentage point to sales growth in the three months ended December 31, 2017.~~

~~The table below presents our sales, attributed~~2022 primarily relates to the ~~geographic regions based upon country~~change in fair value of ~~destination, for the three months ended December 31, 2017, and the percentage change from the same period a year ago (in millions, except percentages):~~previous investment in PTC.

Change vs.
Change in Organic
Sales⁽¹⁾ vs.
Three Months Ended
December 31, 2017 Three Months Ended December 31, 2016 Three Months Ended December 31, 2016
United States $ 851.9
3.9 % 5.4 %
Canada 92.0
11.2 % 11.5 %
Europe, Middle East and Africa (EMEA) 307.4
13.6 % 4.9 %
Asia Pacific 214.5
4.3 % 1.5 %
Latin America 120.8
8.6 % 8.5 %
Total sales $ 1,586.6
6.5 % 5.3 %

⁽¹⁾~~Organic sales and organic sales growth exclude the effect of changes in currency exchange rates, acquisitions and divestitures. See~~ ~~Supplemental Sales Information~~ ~~for information on this non-GAAP measure.~~

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~~ROCKWELL AUTOMATION, INC.~~

~~Three Months EndedDecember 31, 2017, Compared to Three Months Ended December 31, 2016~~

~~United States sales increased in the three months ended December 31, 2017, mainly due to strength in heavy industries, partially offset by weakness in consumer and automotive industries.~~

~~Sales in Canada increased in the three months ended December 31, 2017, led by growth in consumer and heavy industries.~~

~~EMEA sales increased in the three months ended December 31, 2017, with growth in both mature and emerging countries.~~

~~Sales in Asia Pacific increased in the three months ended December 31, 2017, led by China.~~

~~Latin America sales increased in the three months ended December 31, 2017, led by growth in heavy industries and consumer.~~

~~General Corporate - Net~~

~~General corporate - net expenses were $16.2 million in the~~ ~~three~~ ~~months ended~~ ~~December 31, 2017, compared to $14.9 million in the~~ ~~three~~ ~~months ended~~ ~~December 31, 2016~~.

~~Income before Income Taxes~~

~~Income before income taxes increased 16 percent year over year in the~~ ~~three~~ ~~months ended~~ ~~December 31, 2017. Total segment operating earnings increased 12 percent year over year in the~~ ~~three~~ ~~months ended~~ ~~December 31, 2017. The increases in income before income taxes and total segment operating earnings were primarily due to higher sales, partially offset by higher investment spending.~~

~~Income Taxes~~

The effective tax rate for the three months ended December 31, 2017, was 179.4 percent compared to 16.7 percent for the three months ended December 31, 2016. Our Adjusted Effective Tax Rate for the three months ended December 31, 2017, was 18.9 percent compared to 18.1 percent in the three months ended December 31, 2016. The increase in the effective tax rate was due to discrete tax expenses related to the deemed repatriation of foreign earnings ($385.5 million or 129.5 percent) and the revaluation of net deferred tax assets ($94.2 million or 31.6 percent) resulting from the Tax Act. The increase in the Adjusted Effective Tax Rate was primarily due to lower favorable discrete tax items in the current quarter compared to the prior year, partially offset by the impact of the lower U.S. statutory tax rate under the Tax Act. Refer to Note 12 in the Condensed Consolidated Financial Statements for further information regarding the effect of the enactment of the Tax Act on our financial condition and results of operations.

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~~ROCKWELL AUTOMATION, INC.~~

~~Three Months EndedDecember 31, 2017, Compared to Three Months Ended December 31, 2016~~

~~Architecture & Software~~

Three Months Ended December 31,
(in millions, except percentages) 2017 2016 Change
Sales $ 746.9
$ 696.4
$ 50.5

Segment operating earnings 224.6
208.6
16.0

Segment operating margin 30.1 % 30.0 % 0.1
pts

~~Sales~~

~~Architecture & Software sales increased 7.3 percent in the~~ ~~three~~ ~~months ended~~ ~~December 31, 2017, and organic sales increased 4.6 percent. Currency translation increased sales by 2.7 percentage points in the~~ ~~three~~ ~~months ended December 31, 2017.~~

~~Growth in both reported and organic sales was broad-based across all regions for the~~ ~~three~~ ~~months ended December 31, 2017. Canada had the highest reported and organic sales growth rates for the~~ ~~three~~ ~~months ended December 31, 2017.~~

~~Logix sales increased 9 percent year over year in the three months ended December 31, 2017. Logix organic sales increased 6 percent year over year in the~~ ~~three~~ ~~months ended December 31, 2017, and currency translation increased Logix sales by 3 percentage points.~~

~~Operating Margin~~

~~Architecture & Software segment operating earnings increased 8 percent year over year in the~~ ~~three~~ ~~months ended~~ ~~December 31, 2017. Segment operating margin increased to 30.1 percent in the~~ ~~three~~ ~~months ended~~ ~~December 31, 2017, from 30.0 percent a year ago, primarily due to higher sales, partially offset by higher investment spending.~~

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~~ROCKWELL AUTOMATION, INC.~~

~~Three Months EndedDecember 31, 2017, Compared to Three Months Ended December 31, 2016~~

~~Control Products & Solutions~~

Three Months Ended December 31,
(in millions, except percentages) 2017 2016 Change
Sales $ 839.7
$ 793.9
$ 45.8

Segment operating earnings 130.9
108.0
22.9

Segment operating margin 15.6 % 13.6 % 2.0
pts

~~Sales~~

~~Control Products & Solutions sales increased 5.8 percent year over year in the~~ ~~three~~ ~~months ended~~ ~~December 31, 2017, and organic sales increased 5.9 percent. Currency translation increased sales by 2.3 percentage points, and the prior year divestiture reduced sales growth by 2.4 percent in the~~ ~~three~~ ~~months ended December 31, 2017.~~

~~All regions, except Canada, experienced reported and organic sales growth in the~~ ~~three~~ ~~months ended December 31, 2017. Canada reported sales decreased year over year, but organic sales increased. EMEA had the highest reported sales growth rate for the~~ ~~three~~ ~~months ended December 31, 2017, and Latin America had the highest organic sales growth rate.~~

~~Product sales increased 2 percent in the three months ended December 31, 2017, compared to the three months ended December 31, 2016. Product organic sales increased 5 percent year over year in the~~ ~~three~~ months ended December 31, 2017. Currency translation increased sales by 2 percentage points in the three months ended December 31, 2017, and the prior year divestiture reduced sales growth by 5 percentage points.

~~Sales in our solutions and services businesses increased 9 percent in the~~ ~~three~~ ~~months ended December 31, 2017, compared to the~~ ~~three~~ months ended December 31, 2016. Organic sales in our solutions and services business increased 6 percent in the three months ended December 31, 2017, and currency translation increased sales by 3 percentage points.

~~Operating Margin~~

~~Control Products & Solutions segment operating earnings increased 21 percent year over year in the~~ ~~three~~ ~~months ended~~ ~~December 31, 2017. Segment operating margin increased to 15.6 percent in the~~ ~~three~~ ~~months ended December 31, 2017, compared to 13.6 percent a year ago, primarily due to higher sales.~~

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~~ROCKWELL AUTOMATION, INC.~~

Financial Condition

The following is a summary of our cash flows from operating, investing, and financing activities, as reflected in the ~~Condensed~~ Consolidated Statement of Cash Flows (in millions):


							Three Months Ended December 31,
	Three Months Ended December 31,						2023	2022
	2017			2016
Cash provided by (used for):
Cash provided by (used for)
Operating activities
Operating activities
Operating activities	$	212.7		$	310.8
Investing activities	(33.0		)	(37.6		)
Financing activities	(26.6		)	(151.9		)
Effect of exchange rate changes on cash	(17.0		)	(53.1		)
Cash provided by continuing operations	$	136.1		$	68.2
Decrease in cash, cash equivalents, and restricted cash

The following table summarizes free cash flow, ~~(in millions),~~ which is a non-GAAP financial ~~measure:~~measure (in millions):


							Three Months Ended December 31,
	Three Months Ended December 31,						2023	2022
	2017			2016
Cash provided by continuing operating activities	$	212.7		$	310.8
Cash provided by operating activities
Capital expenditures	(34.1		)	(39.4		)
Free cash flow	$	178.6		$	271.4

Our definition of free cash flow takes into consideration capital investments required to maintain the operations of our ~~businesses' operations~~businesses and execute our strategy. Cash provided by ~~continuing~~ operating activities adds back non-cash depreciation expense to earnings but does not reflect a charge for necessary capital expenditures. Our definition of free cash flow excludes the operating cash flows and capital expenditures related to our discontinued operations, if any. Operating, investing, and financing cash flows of our discontinued operations, if any, are presented separately in our ~~statement~~Consolidated Statement of ~~cash flows.~~Cash Flows. In our opinion, free cash flow provides useful information to investors regarding our ability to generate cash from business operations that is available for acquisitions and other investments, service of debt principal, dividends, and share repurchases. We use free cash flow, as defined, as one measure to monitor and evaluate our performance, including as a financial measure for our annual incentive compensation. Our definition of free cash flow may ~~differ~~be different from definitions used by other companies.

Cash provided by operating activities was ~~$212.7 million~~ ~~for the~~ ~~three~~ ~~months ended December 31, 2017, compared to $310.8~~$32.6 million for the three months ended December 31, ~~2016. Free cash flow was $178.6~~2023, compared to $66.3 million for the three months ended December 31, ~~2017, compared to $271.4~~2022. Free cash flow was a net outflow of $35.3 million for the three months ended December 31, ~~2016.~~2023, compared to a net inflow of $42.1 million for the three months ended December 31, 2022. The ~~year-over-year~~year over year decreases in cash provided by operating activities and free cash flow were primarily due to higher incentive compensation payments related to fiscal 2023 performance, lower pre-tax income, and higher tax payments in the first ~~quarter~~three months of ~~fiscal 2018~~2023 compared to the first ~~quarter~~three months of ~~fiscal 2017.~~2022, partially offset by decreases in working capital.

Our Short-term debt as of December 31, 2023, includes commercial paper borrowings of $407.0 million with a weighted average interest rate of 5.41 percent, and a weighted average maturity period of 13 days. We had no commercial paper borrowings as of September 30, 2023. In December 2022, Sensia entered into an unsecured $75.0 million line of credit. As of December 31, 2023, and September 30, 2023, included in Short-term debt was $70.0 million borrowed against the line of credit with an interest rate of 6.25 percent and 6.29 percent, respectively. Also included in Short-term debt as of December 31, 2023, and September 30, 2023, is $23.5 million of interest-bearing loans from SLB to Sensia, due December 31, 2024.

We repurchased approximately ~~1.1~~0.4 million shares of our common stock under our share repurchase program in the first three months of ~~2018~~.2024. The total cost of these shares was ~~$208.6~~$120.3 million,, of which ~~$17.8~~$1.1 million was recorded in ~~accounts~~Accounts payable at December 31, ~~2017~~,2023, related to shares that did not settle until January ~~2018. We had no unsettled~~2024. At September 30, 2023, there were $1.1 million of outstanding common stock share repurchases ~~outstanding at September 30, 2017.~~recorded in Accounts payable. We repurchased approximately 0.6 million shares of our common stock under our share repurchase program in the first three months of ~~2017~~.2023. The total cost of these shares was ~~$80.8~~$156.0 million,, of which ~~$4.5~~$0.8 million was recorded in ~~accounts~~Accounts payable at December 31, ~~2016~~,2022, related to shares that did not settle until January ~~2017. We expect to repurchase $1.2 billion of our common stock during fiscal year 2018.~~2023. Our decision to repurchase shares in the remainder of ~~2018~~2024 will depend on business conditions, free cash flow generation, other cash requirements, ~~(including acquisitions)~~ and stock price. ~~At December 31, 2017, we had approximately $399.8 million remaining for share repurchases under the $1.0 billion share repurchase authorization approved by the Board of Directors in 2016.~~ On ~~January 15, 2018,~~May 2, 2022, the Board of Directors authorized us to expend an additional $1.0 billion to repurchase shares of our common stock. At December 31, 2023, we had approximately $820.0 million remaining for share repurchases under our existing board authorization. See Part II, Item 2, 2. Unregistered Sales of Equity Securities and Use of Proceeds, for additional information regarding share repurchases.

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~~ROCKWELL AUTOMATION, INC.~~

~~Financial Condition (continued)~~

We expect future uses of cash to include working capital requirements, capital expenditures, ~~additional contributions to our retirement plans, acquisitions of businesses,~~ dividends to shareowners, repurchases of common stock, ~~and~~additional contributions to our retirement plans, repayments of ~~debt.~~debt, and acquisitions of businesses and other inorganic investments. We expect to fund future uses of cash with a combination of existing cash balances, ~~and short-term investments,~~ cash generated by operating activities, commercial paper borrowings, or a new ~~issuance~~issuances of debt or other securities.

At September 30, 2017, substantially all of our cash, cash equivalents and investments (funds) were held by non-U.S. subsidiaries where our undistributed earnings were indefinitely reinvested. Due to the enactment of the Tax Act in the first quarter of fiscal 2018, our previously undistributed foreign earnings were subject to a deemed repatriation tax of approximately $385.5 million. Accordingly, these funds will not be subject to further U.S. tax if repatriated. Refer to Note 12 in the Condensed Consolidated Financial Statements for further information regarding the effect of the enactment of the Tax Act of on our financial condition and results of operations.

At December 31, ~~2017,~~2023, the majority of our Cash and ~~September 30, 2017,~~cash equivalents were held by non-U.S. subsidiaries. As a result of the broad changes to the U.S. international tax system under the Tax Act, the Company accounts for taxes on earnings of substantially all of its non-U.S. subsidiaries including both non-U.S. and U.S. taxes. The Company has concluded that earnings of a limited number of its non-U.S. subsidiaries are indefinitely reinvested.

In June 2022, we replaced our ~~total current borrowing capacity under our~~former $1.25 billion unsecured revolving credit facility with a new five-year $1.5 billion unsecured revolving credit facility, expiring in ~~March 2020 was $1.0 billion.~~June 2027. This credit facility uses the secured overnight funding rate (SOFR) as the primary basis for determining interest payments. We can increase the aggregate amount of this credit facility by up to ~~$350.0~~$750.0 million, subject to the consent of the banks in the credit facility. We did not borrow against this credit facility during the ~~three months~~periods ended December 31, ~~2017.~~2023, or September 30, 2023. Borrowings under this credit facility bear interest based on short-term money market rates in effect during the period the borrowings are outstanding. The terms of this credit facility contain covenants under which we agree to maintain an EBITDA-to-interest ratio of at least 3.0 to 1.0. The EBITDA-to-interest ratio is defined in ~~an amendment to~~ the credit facility as the ratio of consolidated EBITDA (as defined in the ~~amendment)~~facility) for the preceding four quarters to consolidated interest expense for the same period.

Among other uses, we can draw on our credit facility as a standby liquidity facility to repay our outstanding commercial paper as it matures. This access to funds to repay maturing commercial paper is an important factor in maintaining the short-term credit ratings set forth in the table below. Under our current policy with respect to these ratings, we expect to limit our other borrowings under our credit facility, if any, to amounts that would leave enough credit available under the facility so that we could borrow, if needed, to repay all of our then outstanding commercial paper as it matures.

Separate short-term unsecured credit facilities of approximately $227.6 million at December 31, 2023, were available to non-U.S. subsidiaries, of which, approximately $33.2 million was committed under letters of credit. Borrowings under our non-U.S. credit facilities at December 31, 2023, and September 30, 2023, were not significant. We were in compliance with all covenants under our credit facilities at December 31, 2023, and September 30, 2023. There are no significant commitment fees or compensating balance requirements under our credit facilities.

The following is a summary of our credit ratings as of December 31, ~~2017~~:

Credit Rating Agency

Short-Term Rating

Long-Term Rating

Outlook

Standard & Poor’s

A-1

~~A-1~~

~~Stable~~Negative

Moody’s

P-2

~~P-2~~

Stable

Fitch Ratings

Stable

Our ability to access the commercial paper market, and the related costs of these borrowings, is affected by the strength of our credit ratings and market conditions. We have not experienced any difficulty in accessing the commercial paper ~~market to date.~~market. If our access to the commercial paper market is adversely affected due to a change in market conditions or otherwise, we would expect to rely on a combination of available cash and our unsecured committed credit facility to provide short-term funding. In such event, the cost of borrowings under our unsecured committed credit facility could be higher than the cost of commercial paper borrowings.

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~~ROCKWELL AUTOMATION, INC.~~

~~Financial Condition (continued)~~

We use foreign currency forward exchange contracts to manage certain foreign currency risks. We enter into these contracts to hedge our exposure to foreign currency exchange rate variability in the expected future cash flows associated with certain third-party and intercompany transactions denominated in foreign currencies forecasted to occur within the next two years. We also may use these contracts to hedge portions of our net investments in certain non-U.S. subsidiaries against the effect of exchange rate fluctuations on the translation of foreign currency balances to the U.S. dollar. There were no open net investment hedges for the three months ended December 31, 2023, or September 30, 2023. In addition, we use foreign currency forward exchange contracts that are not designated as hedges to offset transaction gains or losses associated with some of our assets and liabilities resulting from intercompany loans or other transactions with third parties that are denominated in currencies other than our entities' functional currencies. Our foreign currency forward exchange contracts are usually denominated in currencies of major industrial countries. We diversify our foreign currency forward exchange contracts among counterparties to minimize exposure to any one of these entities.

Net gains and losses related to derivative forward exchange contracts designated as cash flow hedges offset the related gains and losses on the hedged items during the periods in which the hedged items are recognized in earnings. During the three months ended December 31, ~~2017 and December 31, 2016,~~2023, we reclassified ~~$5.2~~$8.5 million in pre-tax net ~~losses and $0.2 million in pre-tax net~~ gains ~~respectively,~~ related to cash flow hedges from ~~accumulated~~Accumulated other comprehensive loss into the ~~Condensed~~ Consolidated Statement of Operations. WeDuring the three months ended December 31, 2022, we reclassified $12.7 million in pre-tax net gains related to cash flow hedges from Accumulated other comprehensive loss into the Consolidated Statement of Operations. As of December 31, 2023, we expect that approximately ~~$16.2~~$11.1 million of pre-tax net unrealized losses on cash flow hedges ~~as of December 31, 2017,~~ will be reclassified into earnings during the next 12 months.

Information with respect to our contractual cash obligations is contained in Item 7, 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, of our Annual Report on Form 10-K for the ~~fiscal~~ year ended September 30, ~~2017.~~2023. We believe that at December 31, ~~2017,~~2023, there has been no material change to this information, except regarding the repayment of our $250.0 million 5.65% notes and regarding the transition tax required by the Tax Act as discussed in Note 5 and Note 12, respectively, in the Condensed Consolidated Financial Statements.information.

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~~ROCKWELL AUTOMATION, INC.~~

We translate sales of subsidiaries operating outside of the United States using exchange rates effective during the respective period. Therefore, changes in currency exchange rates affect our reported sales. Sales by acquired businesses also affect our reported sales. We believe that organic sales, defined as sales excluding the effects of acquisitions and changes in currency exchange rates, ~~and acquisitions,~~ which is a non-GAAP financial measure, provides useful information to investors because it reflects regional and operating segment performance from the activities of our businesses without the effect of acquisitions and changes in currency exchange ~~rates and acquisitions.~~rates. We use organic sales as one measure to monitor and evaluate our regional and operating segment performance. When we acquire businesses, we exclude sales in the current period for which there are no comparable sales in the prior period. We determine the effect of changes in currency exchange rates by translating the respective period’s sales using the same currency exchange rates that were in effect during the prior year. ~~When we acquire businesses, we exclude sales in the current period for which there are no comparable sales in the prior period.~~ When we divest a business, we exclude sales in the prior period for which there are no comparable sales in the current period. Organic sales growth is calculated by comparing organic sales to reported sales in the prior year, excluding divestitures. We attribute sales to the geographic regions based on the country of destination.

The following is a reconciliation of ~~our~~ reported sales to organic sales by geographic region ~~to organic sales~~ (in millions):

The following is a reconciliation of ~~our~~ reported sales to organic sales by operating segment ~~to organic sales~~ (in millions):

Table of Contents

~~ROCKWELL AUTOMATION, INC.~~

We have prepared the ~~Condensed~~ Consolidated Financial Statements in accordance with accounting principles generally accepted in the United States, which require us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the ~~consolidated financial statements~~Consolidated Financial Statements and revenues and expenses during the periods reported. These estimates are based on our best judgment about current and future conditions, but actual results could differ from those estimates. Information with respect to accounting estimates that are the most critical to the understanding of our financial statements as they could have the most significant effect on our reported results and require subjective or complex judgments by management is contained in Item 7, 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, of our Annual Report on Form 10-K for the ~~fiscal~~ year ended September 30, ~~2017~~.2023. We believe that at December 31, ~~2017~~,2023, there has been no material change to this information, except as noted below.

Acquisitions - Clearpath Intangible Assets Valuation

We account for business acquisitions by allocating the purchase price to tangible and intangible assets acquired and liabilities assumed at their fair values; the excess of the purchase price over the allocated amount is recorded as goodwill. We engaged an independent third-party valuation specialist to assist with the fair value allocation of the intangible assets assumed through the acquisition of Clearpath. The intangible assets were valued using income approaches, specifically the relief from royalty method and multi-period excess earnings method. This required the use of several assumptions and estimates including forecasted revenue growth rates, margin, and cash flows attributable to existing customers, obsolescence factor, royalty rate, contributory asset charges, customer attrition rate, and discount rates. Although we believe the assumptions and estimates made were reasonable and appropriate, these estimates require judgment and are based in part on historical experience and information obtained from Clearpath management.

The key assumption requiring the use of judgement in the valuation of the $269.6 million technology asset was the obsolescence factor. The obsolescence factor of twelve years was calculated based on the depletion of existing technology using a variety of factors including research and development spend toward new product development and scheduled patent expiration. A two-year change in this assumption would result in a change of approximately $82 million in intangible assets. The key assumption requiring the use of judgement in the valuation of the $41.6 million trademark intangible asset was the weighted average royalty rate of 2.05 percent. This rate was based on royalty market data. A 100 basis point change in the royalty rate would result in a change of $20 million in intangible assets.

More information regarding ~~the critical estimates involved in our accounting for the Tax Act as discussed~~these business acquisitions is contained in Note 125 in the ~~Condensed~~ Consolidated Financial Statements.

Environmental Matters

Information with respect to the effect of compliance with environmental protection requirements and resolution of environmental claims on us and our manufacturing operations is contained in Note 1417 in the Consolidated Financial Statements in Item 8, 8. Financial Statements and Supplementary Data, of our Annual Report on Form 10-K for the ~~fiscal~~ year ended September 30, ~~2017~~.2023. We believe that at December 31, ~~2017~~,2023, there has been no material change to this information.

Recent Accounting Pronouncements

See Note 1 in the ~~Condensed~~ Consolidated Financial Statements regarding recent accounting pronouncements.

Item 3.Quantitative and Qualitative Disclosures About Market Risk

Information with respect to our exposure to ~~interest rate~~foreign currency risk and ~~foreign currency~~interest rate risk is contained in Item ~~7A,~~ 7A. Quantitative and Qualitative Disclosures About Market Risk, of our Annual Report on Form 10-K for the ~~fiscal~~ year ended September 30, ~~2017~~.2023. We believe that at December 31, ~~2017,~~2023, there has been no material change to this information.

Item 4. Controls and Procedures

Disclosure Controls and Procedures: We, with the participation of our Chief Executive Officer and Chief Financial Officer, have evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (Exchange Act)) as of the end of the ~~fiscal~~ quarter covered by this report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the ~~fiscal~~ quarter covered by this report, our disclosure controls and procedures were effective.

Internal Control Over Financial Reporting: There has not been any change in our internal control over financial reporting (as such term is defined in Exchange Act Rule 13a-15(f)) during the ~~fiscal~~ quarter to which this report relates that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. In connection with our adoption of the new revenue recognition standard in the first quarter of fiscal 2019, we expect to implement additional functionality within our enterprise-wide information technology system which could result in enhancements and modifications to related internal controls over financial reporting during the remainder of fiscal 2018.

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~~ROCKWELL AUTOMATION, INC.~~

PART II. OTHER INFORMATION

Item 1.Legal Proceedings

Information with respect to our legal proceedings is contained in Item 3, 3. Legal Proceedings, of our Annual Report on Form 10-K for the ~~fiscal~~ year ended September 30, ~~2017~~.2023. We believe that at December 31, ~~2017~~,2023, there has been no material change to this information.

Item 1A.Risk Factors

Information about our most significant risk factors is contained in Item ~~1A,~~ 1A. Risk Factors, of our Annual Report on Form 10-K for the ~~fiscal~~ year ended September 30, ~~2017~~.2023. We believe that at December 31, ~~2017~~,2023, there has been no material change to this information.

~~Table of Contents~~

~~ROCKWELL AUTOMATION, INC.~~

Item 2.Unregistered Sales of Equity Securities and Use of Proceeds

The table below sets forth information with respect to purchases made by or on behalf of us of shares of our common stock during the three months ended December 31, ~~2017~~:2023:


Period	Total Number of Shares Purchased (1)	Average Price Paid Per Share (2)		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Approx. Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (3)
October 1-31, 2023	118,222	$	279.11	118,222	$	907,312,780
November 1-30, 2023	284,983	268.07		284,983	830,917,548
December 1-31, 2023	37,137	294.78		37,137	819,970,467
Total	440,342	$	273.28	440,342

(1) All of the shares purchased during the quarter ended December 31, 2023, were acquired pursuant to the repurchase program described in (3) below.

(2) Average price paid per share includes brokerage commissions.

(3) On May 2, 2022, the Board of Directors authorized us to expend an additional $1.0 billion to repurchase shares of our common stock. Our repurchase program allows us to repurchase shares at management’s discretion or at our broker’s discretion pursuant to a share repurchase plan subject to price and volume parameters.

Period Total Number of Shares Purchased
Average Price Paid Per Share⁽¹⁾
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
Maximum Approx. Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs⁽²⁾
October 1 - 31, 2017 —
$ —
—
$ 608,404,669
November 1 - 30, 2017 180,000
192.46
180,000
573,762,216
December 1 - 31, 2017 900,000
193.28
900,000
399,810,783
Total 1,080,000
193.14
1,080,000

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~~ROCKWELL AUTOMATION, INC.~~

Item 5. Other Information

During the quarter ended December 31, 2023, the following officers of the Company adopted Rule 10b5-1 trading arrangements that are each intended to satisfy the affirmative defense of Rule 10b5-1(c) promulgated under the Exchange Act, with such details of the arrangements as further follows:

•Robert L. Buttermore, Senior Vice President and Chief Supply Chain Officer, adopted a Rule 10b5-1 trading arrangement on November 30, 2023, that will terminate on the earlier of February 28, 2025, or the execution of all trades in the trading arrangement. Mr. Buttermore’s trading arrangement covers the sale of (i) 1,664 long shares of the Company's common stock and (ii) the number of shares of the Company’s common stock required to be sold to cover taxes on upcoming restricted stock unit and performance share vests.

•Matthew Fordenwalt, Senior Vice President Lifecycle Services, adopted a Rule 10b5-1 trading arrangement on November 29, 2023, that will terminate on the earlier of December 31, 2024, or the execution of all trades in the trading arrangement. Mr. Fordenwalt’s trading arrangement covers the sale of the number of shares of the Company’s common stock required to be sold to cover taxes on upcoming restricted stock unit and performance share vests.

•Scott A. Genereux, Senior Vice President and Chief Revenue Officer, adopted a Rule 10b5-1 trading arrangement on November 30, 2023, that will terminate on the earlier of December 31, 2024, or the execution of all trades in the trading arrangement. Mr. Genereux’s trading arrangement covers the sale of (i) 2,000 long shares of the Company's common stock and (ii) the number of shares of the Company’s common stock required to be sold to cover taxes on upcoming restricted stock unit and performance share vests.

•Rebecca W. House, Senior Vice President, Chief People and Legal Officer and Secretary, adopted a Rule 10b5-1 trading arrangement on November 29, 2023, that will terminate on the earlier of December 31, 2024, or the execution of all trades in the trading arrangement. Ms. House’s trading arrangement covers the (i) exercise of 13,900 stock options and the sale of the underlying shares of the Company's common stock and (i) the sale of the number of shares of the Company’s common stock required to be sold to cover taxes on upcoming restricted stock unit vests.

•Frank C. Kulaszewicz, Senior Vice President, adopted a Rule 10b5-1 trading arrangement on November 28, 2023, that will terminate on the earlier of May 31, 2024, or the execution of all trades in the trading arrangement. Mr. Kulaszewicz’s trading arrangement covers the (i) sale of 466 long shares of the Company's common stock and (ii) exercise of 6,000 stock options and the sale of the underlying shares of the Company's common stock.

•John M. Miller, Vice President and Chief Intellectual Property Counsel, adopted a Rule 10b5-1 trading arrangement on November 30, 2023, that will terminate on the earlier of December 31, 2024, or the execution of all trades in the trading arrangement. Mr. Miller’s trading arrangement covers the (i) exercise of 934 stock options and the sale of the underlying shares of the Company's common stock and (ii) sale of the number of shares of the Company’s common stock required to be sold to cover taxes on upcoming restricted stock unit and performance share vests.

•Tessa M. Myers, Senior Vice President, Intelligent Devices, adopted a Rule 10b5-1 trading arrangement on November 30, 2023, that will terminate on the earlier of June 10, 2024, or the execution of all trades in the trading arrangement. Ms. Myers’ trading arrangement covers the sale of the number of shares of the Company’s common stock required to be sold to cover taxes on an upcoming restricted stock unit vest.

•Christopher Nardecchia, Senior Vice President and Chief Information Officer, adopted a Rule 10b5-1 trading arrangement on November 30, 2023, that will terminate on the earlier of December 31, 2024, or the execution of all trades in the trading arrangement. Mr. Nardecchia’s trading arrangement covers the (i) exercise of 7,000 stock options and the sale of the underlying shares of the Company's common stock and (ii) sale of the number of shares of the Company’s common stock required to be sold to cover taxes on upcoming restricted stock unit and performance share vests.

•Terry L. Riesterer, Vice President and Controller, adopted a Rule 10b5-1 trading arrangement on November 27, 2023, that will terminate on the earlier of December 31, 2024, or the execution of all trades in the trading arrangement. Mr. Riesterer’s trading arrangement covers the (i) exercise of 2,100 stock options and the sale of the underlying shares of the Company's common stock and (ii) sale of the number of shares of the Company’s common stock required to be sold to cover taxes on upcoming restricted stock unit and performance share vests.

•Isaac R. Woods, Vice President and Treasurer, adopted a Rule 10b5-1 trading arrangement on November 29, 2023, that will terminate on the earlier of December 31, 2024, or the execution of all trades in the trading arrangement. Mr. Woods’ trading arrangement covers the sale of (i) 300 long shares of the Company's common stock and (ii) the number of shares of the Company’s common stock required to be sold to cover taxes on upcoming restricted stock unit and performance share vests.

For the arrangements above referencing transactions to sell shares to cover taxes on vests, the aggregate number of shares to be sold pursuant to each trading arrangement described above is dependent on the taxes on the applicable restricted stock unit and performance share vests, and, therefore, is indeterminable at this time.

During the quarter ended December 31, 2023, no director or officer of the Company adopted or terminated a “non-Rule 10b5-1 trading arrangement,” as defined in Item 408 of Regulation S-K, no director of the Company adopted or terminated a Rule 10b5-1 trading arrangement, and no officer of the Company terminated a Rule 10b5-1 trading arrangement.


Delaware			25-1797617

~~Delaware~~	~~25-1797617~~
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)


	December 31, 2023							December 31, 2023	September 30, 2023
ASSETS							ASSETS
Current assets
Cash and cash equivalents
Cash and cash equivalents
Cash and cash equivalents

	December 31, 2017			September 30, 2017
ASSETS
Current assets:
Cash and cash equivalents	$	1,547.0		$	1,410.9
Short-term investments	1,100.5			1,124.6
Receivables
Receivables
Receivables	1,149.9			1,135.5
Inventories	570.8			558.7
Other current assets	165.7			191.0
Total current assets	4,533.9			4,420.7
Property, net of accumulated depreciation of $1,534.8 and $1,511.9, respectively	565.8			583.9
Property, net of accumulated depreciation of $1,866.3 and $1,828.3, respectively
Operating lease right-of-use assets
Goodwill	1,082.3			1,077.7
Other intangible assets, net	234.0			238.0
Deferred income taxes	334.8			443.6
Long-term investments
Other assets	407.9			397.8
Total	$	7,158.7		$	7,161.7
LIABILITIES AND SHAREOWNERS’ EQUITY	LIABILITIES AND SHAREOWNERS’ EQUITY						LIABILITIES AND SHAREOWNERS’ EQUITY
Current liabilities:
Current liabilities
Short-term debt
Short-term debt
Short-term debt	$	840.0		$	350.4
Current portion of long-term debt	—			250.0

Accounts payable
Accounts payable
Accounts payable	582.2			623.2
Compensation and benefits	194.3			272.6
Advance payments from customers and deferred revenue	267.5			240.6
Contract liabilities
Customer returns, rebates and incentives	176.8			188.8
Other current liabilities	225.8			220.2
Total current liabilities	2,286.6			2,145.8
Long-term debt	1,239.3			1,243.4
Retirement benefits	880.6			892.5
Operating lease liabilities
Other liabilities	596.0			216.4
Commitments and contingent liabilities (Note 11)
Shareowners’ equity:
Commitments and contingent liabilities (Note 13)							Commitments and contingent liabilities (Note 13)
Shareowners’ equity
Common stock ($1.00 par value, shares issued: 181.4)
Common stock ($1.00 par value, shares issued: 181.4)
Common stock ($1.00 par value, shares issued: 181.4)	181.4			181.4
Additional paid-in capital	1,642.9			1,638.0
Retained earnings	5,759.7			6,103.4
Accumulated other comprehensive loss	(1,175.7		)	(1,179.2		)
Common stock in treasury, at cost (shares held: December 31, 2017, 53.6; September 30, 2017, 53.0)	(4,252.1		)	(4,080.0		)
Common stock in treasury, at cost (shares held: 66.8 and 66.6, respectively)
Shareowners’ equity attributable to Rockwell Automation, Inc.
Noncontrolling interests
Total shareowners’ equity	2,156.2			2,663.6
Total	$	7,158.7		$	7,161.7


							Three Months Ended December 31,
	Three Months Ended December 31,						2023	2022
	2017			2016
Operating activities:
Net (loss) income	$	(236.4	)	$	214.7
Adjustments to arrive at cash provided by operating activities:
Operating activities:
Operating activities:
Net income
Net income
Net income
Adjustments to arrive at cash provided by operating activities
Depreciation
Depreciation
Depreciation	32.5			32.5
Amortization of intangible assets	7.1			7.9
Change in fair value of investments
Share-based compensation expense	8.6			10.7
Retirement benefit expense	28.3			43.0
Retirement benefit expense (income)
Net loss on disposition of property

Pension contributions	(11.6		)	(13.5		)
Net loss on disposition of property	—			0.3
Changes in assets and liabilities, excluding effects of acquisitions and foreign currency adjustments:

Pension contributions

Pension contributions
Changes in assets and liabilities, excluding effects of acquisitions and foreign currency adjustments
Receivables
Receivables
Receivables	(18.4		)	6.0
Inventories	(19.2		)	(27.9		)
Accounts payable	(36.8		)	(10.4		)
Advance payments from customers and deferred revenue	27.9			16.8
Contract liabilities
Compensation and benefits	(77.0		)	22.4
Income taxes	508.0			22.3
Other assets and liabilities	(0.3		)	(14.0		)
Cash provided by operating activities	212.7			310.8

Investing activities:
Capital expenditures	(34.1		)	(39.4		)
Capital expenditures
Capital expenditures
Acquisition of businesses, net of cash acquired	(9.9		)	(1.1		)
Purchases of investments	(275.2		)	(191.3		)
Proceeds from maturities of investments	234.5			193.9

Proceeds from sale of investments	51.5			—
Proceeds from sale of property	0.2			0.3
Proceeds from sale of investments
Proceeds from sale of investments

Other investing activities

Other investing activities

Other investing activities
Cash used for investing activities	(33.0		)	(37.6		)
Financing activities:
Net issuance of short-term debt
Net issuance of short-term debt
Net issuance of short-term debt

Financing activities:
Net issuance (repayment) of short-term debt	489.6			(40.0		)
Repayment of long-term debt	(250.0		)	—
Repayment of short-term debt
Repayment of short-term debt
Repayment of short-term debt

Cash dividends
Cash dividends
Cash dividends	(107.3		)	(97.5		)
Purchases of treasury stock	(190.8		)	(82.0		)
Proceeds from the exercise of stock options	30.1			67.6
Other financing activities	1.8			—
Cash used for financing activities	(26.6		)	(151.9		)
Cash provided by (used for) financing activities
Effect of exchange rate changes on cash
Decrease in cash, cash equivalents, and restricted cash
Cash, cash equivalents, and restricted cash at beginning of period
Cash, cash equivalents, and restricted cash at end of period
Components of cash, cash equivalents, and restricted cash
Cash and cash equivalents
Cash and cash equivalents
Cash and cash equivalents
Restricted cash, current (Other current assets)

Effect of exchange rate changes on cash	(17.0		)	(53.1		)

Increase in cash and cash equivalents	136.1			68.2
Cash and cash equivalents at beginning of period	1,410.9			1,526.4
Cash and cash equivalents at end of period	$	1,547.0		$	1,594.6
Total cash, cash equivalents, and restricted cash
Total cash, cash equivalents, and restricted cash
Total cash, cash equivalents, and restricted cash


	December 31, 2023		December 31, 2022
Balance as of beginning of year	$	653.6	$	541.3
Balance as of end of period	673.9		602.4


	December 31, 2023		September 30, 2023
Finished goods	$	569.9	$	545.9
Work in process	367.5		395.7
Raw materials	536.6		463.3
Inventories	$	1,474.0	$	1,404.9


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



	Page No.
PART I. FINANCIAL INFORMATION

Item 1. ~~Condensed Consolidated~~ Financial ~~Statements:~~Statements

~~Condensed~~ Consolidated Balance Sheet		34

~~Condensed~~ Consolidated Statement of Operations		45

~~Condensed~~ Consolidated Statement of Comprehensive ~~(Loss)~~ Income		56

~~Condensed~~ Consolidated Statement of Cash Flows		67

Consolidated Statement of Shareowners' Equity		8

Notes to ~~Condensed~~ Consolidated Financial Statements		79

Report of Independent Registered Public Accounting Firm (PCAOB ID No. 34)		2124

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		2225

Item 3. Quantitative and Qualitative Disclosures About Market Risk		38

Item 4. Controls and Procedures		38

PART II. OTHER INFORMATION

Item 1. Legal Proceedings		39

Item 1A. Risk Factors		39

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		4039

Item 5. Other Information		40

Item 6. Exhibits		4142

Signatures		43


	Three Months Ended December 31,
	2023			2022
	Grants	Wtd. Avg. Share Fair Value		Grants	Wtd. Avg. Share Fair Value
Stock options	217	$	85.91	233	$	77.62
Performance shares	79	295.06		66	340.77
Restricted stock units	235	276.46		211	259.67
Unrestricted stock	5	279.50		6	259.81


	Purchase Price Allocation
Receivables	$	8.2
Inventory	22.1
Goodwill	267.0
Intangible assets	313.1
All other assets	10.8
Total assets acquired	621.2
Less: Liabilities assumed	(12.7)
Net assets acquired	$	608.5

	Purchase Consideration
Cash consideration, net of cash acquired	$	565.5
Contingent consideration	43.0
Total purchase consideration, net of cash acquired	$	608.5


	Purchase Price Allocation

Receivables	$	23.8
Inventories	17.7
Property	27.5
Goodwill	111.3
Other intangible assets	54.1
All other assets	21.0
Total assets acquired	255.4
Less: Liabilities assumed	(12.6)
Less: Deferred income taxes	(56.6)

Net assets acquired, excluding cash	$	186.2

	Purchase Consideration
Total purchase consideration, net of cash acquired	$	186.2



	Architecture & Software			Control Products & Solutions			Total
Balance as of September 30, 2017	$	417.2		$	660.5		$	1,077.7
Acquisition of business	6.8			—			6.8
Translation	(0.6		)	(1.6		)	(2.2		)
Balance as of December 31, 2017	$	423.4		$	658.9		$	1,082.3



	December 31, 2017
	Carrying Amount		Accumulated Amortization		Net
Amortized intangible assets:
Computer software products	$	194.8	$	116.1	$	78.7
Customer relationships	114.4		62.8		51.6
Technology	107.4		59.5		47.9
Trademarks	32.4		21.8		10.6
Other	11.4		9.9		1.5
Total amortized intangible assets	460.4		270.1		190.3
Allen-Bradley^® trademark not subject to amortization	43.7		—		43.7
Total	$	504.1	$	270.1	$	234.0



	September 30, 2017
	Carrying Amount		Accumulated Amortization		Net
Amortized intangible assets:
Computer software products	$	194.8	$	113.2	$	81.6
Customer relationships	114.5		61.5		53.0
Technology	104.8		57.9		46.9
Trademarks	32.3		21.1		11.2
Other	11.4		9.8		1.6
Total amortized intangible assets	457.8		263.5		194.3
Allen-Bradley^® trademark not subject to amortization	43.7		—		43.7
Total	$	501.5	$	263.5	$	238.0



	December 31, 2017		September 30, 2017
Certificates of deposit and time deposits	$	975.1	$	1,005.3
Commercial paper	26.4		20.3
Corporate debt securities	201.0		199.4
Government securities	123.9		116.8
Asset-backed securities	48.2		45.8
Total	$	1,374.6	$	1,387.6



	Fair Value
Less than one year	$	1,100.5
Due in one to five years	274.1
Total	$	1,374.6



	December 31, 2017
	Level 1		Level 2		Level 3		Total
Certificates of deposit and time deposits	$	—	$	975.1	$	—	$	975.1
Commercial paper	—		26.4		—		26.4
Corporate debt securities	—		201.0		—		201.0
Government securities	106.1		17.8		—		123.9
Asset-backed securities	—		48.2		—		48.2
Total	$	106.1	$	1,268.5	$	—	$	1,374.6



Three Months Ended December 31, 2017
	Pension and other postretirement benefit plan adjustments, net of tax			Accumulated currency translation adjustments, net of tax			Net unrealized gains (losses) on cash flow hedges, net of tax			Net unrealized gains (losses) on available-for-sale investments, net of tax			Total accumulated other comprehensive loss, net of tax
Balance as of September 30, 2017	$	(927.0	)	$	(237.7	)	$	(14.4	)	$	(0.1	)	$	(1,179.2	)
Other comprehensive loss before reclassifications	—			(16.1		)	(3.4		)	(1.1		)	(20.6		)
Amounts reclassified from accumulated other comprehensive loss	20.2			—			3.9			—			24.1
Other comprehensive income (loss)	20.2			(16.1		)	0.5			(1.1		)	3.5
Balance as of December 31, 2017	$	(906.8	)	$	(253.8	)	$	(13.9	)	$	(1.2	)	$	(1,175.7	)



Three Months Ended December 31, 2016
	Pension and other postretirement benefit plan adjustments, net of tax			Accumulated currency translation adjustments, net of tax			Net unrealized gains (losses) on cash flow hedges, net of tax			Net unrealized gains (losses) on available-for-sale investments, net of tax		Total accumulated other comprehensive loss, net of tax
Balance as of September 30, 2016	$	(1,239.8	)	$	(294.9	)	$	(4.1	)	$	—	$	(1,538.8	)
Other comprehensive income (loss) before reclassifications	0.7			(86.2		)	11.8			—		(73.7		)
Amounts reclassified from accumulated other comprehensive loss	23.8			—			(0.2		)	—		23.6
Other comprehensive income (loss)	24.5			(86.2		)	11.6			—		(50.1		)
Balance as of December 31, 2016	$	(1,215.3	)	$	(381.1	)	$	7.5		$	—	$	(1,588.9	)



	Three Months Ended December 31,						Affected Line in the Condensed Consolidated Statement of Operations
	2017			2016
Pension and other postretirement benefit plan adjustments:
Amortization of prior service credit	$	(1.1	)	$	(2.3	)	(a)
Amortization of net actuarial loss	28.7			38.5			(a)
Settlements	—			0.2			(a)
	27.6			36.4			Income before income taxes
	(7.4		)	(12.6		)	Income tax provision
	$	20.2		$	23.8		Net income

Net unrealized losses (gains) on cash flow hedges:
Forward exchange contracts	$	(0.5	)	$	0.5		Sales
Forward exchange contracts	5.9			(1.0		)	Cost of sales
Forward exchange contracts	(0.2		)	0.3			Selling, general and administrative expenses
	5.2			(0.2		)	Income before income taxes
	(1.3		)	—			Income tax provision
	$	3.9		$	(0.2	)	Net income

Total reclassifications	$	24.1		$	23.6		Net income



	IP Index	PMI	Industrial Equipment Spending (in billions)	Capacity Utilization (percent)
Fiscal 2018 quarter ended:
December 2017	106.9	59.7	249.3	77.5
Fiscal 2017 quarter ended:
September 2017	104.8	60.8	246.7	76.2
June 2017	105.1	57.8	241.7	76.6
March 2017	103.7	57.2	234.3	75.8
December 2016	103.3	54.5	229.0	75.8
Fiscal 2016 quarter ended:
September 2016	103.1	51.7	226.0	75.8



			Change vs.		Change in Organic Sales⁽¹⁾ vs.
	Three Months Ended December 31, 2017		Three Months Ended December 31, 2016		Three Months Ended December 31, 2016
United States	$	851.9	3.9	%	5.4	%
Canada	92.0		11.2	%	11.5	%
Europe, Middle East and Africa (EMEA)	307.4		13.6	%	4.9	%
Asia Pacific	214.5		4.3	%	1.5	%
Latin America	120.8		8.6	%	8.5	%
Total sales	$	1,586.6	6.5	%	5.3	%



	Three Months Ended December 31,
(in millions, except percentages)	2017			2016			Change
Sales	$	746.9		$	696.4		$	50.5
Segment operating earnings	224.6			208.6			16.0
Segment operating margin	30.1		%	30.0		%	0.1		pts


	Three Months Ended December 31, 2017											Three Months Ended December 31, 2016
	Sales		Effect of Changes in Currency			Sales Excluding Effect of Changes in Currency		Effect of Acquisitions		Organic Sales		Sales		Effect of Divestitures			Sales Excluding Divestitures		Three Months Ended December 31, 2023				Three Months Ended December 31, 2022
United States	$	851.9	$	(0.7	)	$	851.2	$	—	$	851.2	$	820.1	$	(12.3	)	$	807.8
Canada	92.0		(4.4		)	87.6		—		87.6		82.7		(4.1		)	78.6
EMEA	307.4		(23.4		)	284.0		—		284.0		270.7		—			270.7
	Reported Sales																			Reported Sales	Less: Effect of Acquisitions	Effect of Changes in Currency		Organic Sales	Reported Sales
North America
Europe, Middle East, and Africa
Asia Pacific	214.5		(5.8		)	208.7		—		208.7		205.6		—			205.6
Latin America	120.8		(2.1		)	118.7		—		118.7		111.2		(1.8		)	109.4
Total Company Sales	$	1,586.6	$	(36.4	)	$	1,550.2	$	—	$	1,550.2	$	1,490.3	$	(18.2	)	$	1,472.1



Period	Total Number of Shares Purchased	Average Price Paid Per Share⁽¹⁾		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Approx. Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs⁽²⁾
October 1 - 31, 2017	—	$	—	—	$	608,404,669
November 1 - 30, 2017	180,000	192.46		180,000	573,762,216
December 1 - 31, 2017	900,000	193.28		900,000	399,810,783
Total	1,080,000	193.14		1,080,000


~~(1)~~	~~Average price paid per share includes brokerage commissions.~~



~~Exhibit No.~~		~~Exhibit~~
15		~~Letter of Deloitte & Touche LLP regarding Unaudited Financial Information.~~
~~31.1~~		~~Certification of Periodic Report by the Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934.~~
~~31.2~~		~~Certification of Periodic Report by the Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934.~~
~~32.1~~		~~Certification of Periodic Report by the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.~~
~~32.2~~		~~Certification of Periodic Report by the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.~~
~~101~~		~~Interactive Data Files.~~